Renew Power Bids To Acquire Thapar Group’s Wind Power Plant For 1000 Crore
Renew Power, led by Sumant Sinha, is going to buy KC Thapar Group’s Wind Power Assets for Rs 1000 Crore. This will help India’s largest renewable energy company to strengthen its position in this sector, which is increasingly consolidated.
Renew Power will buy the fully operational three power plants in Andhra Pradesh. Their total production capacity is 103 MW. In fact, the market leader company has changed its strategy and now it is focusing more on moving ahead through big acquisitions instead of expanding on its own. Renew Power left behind a dozen Indian and foreign sides who bid in the race to get these assets.
Renew Power’s Deputy Chief Financial Officer Kailash Vaswani stated that, “Buying wind power assets of KCT Group will strengthen our leadership position in India’s rapidly changing Renewable Energy Segment.” It did not give the financial details of the transaction, but sources stated that the value of assets is Rs 1000 Crore and these plants have contracts for distribution companies to sell electricity at a rate of 4.80 per unit for 25 Years.
Recently, wind power tariff decreased to Rs 3.46 per unit in auctions. This major downturn reduced margins in solar and wind power business. This led to increased activity of merger and acquisition in this sector, especially after the government auction of projects started. Many foreign companies have participated in these auctions so that they can be stepped up in the Indian market.
Kotak Investment Banking, which advises KCT Group, said that the sale process started four months ago and after that, a dozen of strategic and financial investors had shown interest in these assets. Alok Verma, executive director of Kotak Investment Banking, said, “These plants are having turbines of large global suppliers. These plants are in good places. Due to these reasons, the deal was attractive. The interest shown by the bidders is proof of this sector turning out to be smart and for long periods of time.”
Vaswani said that Renew Power is buying Top-Quality Assets. He said, “Wind farms of KCT have been put in partnership with global technology companies like GE and Gamesa. With this acquisition, Renew Power will get high quality and high capacity turbines and the load factor of these plants is also high.
Along with this, the acquirer also has its footprints in states such as Gujarat, Karnataka, Madhya Pradesh, Maharashtra, and Rajasthan.