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Monday, February 6, 2023

Mubadala, BlackRock to invest Rs 4,000 crore in Tata Power Renewable Energy

Tata Power announced on Thursday that it has entered into a binding agreement with BlackRock Real Assets-led consortium, including Mubadala Investment Company, to invest in its renewable energy subsidiary, Tata Power Renewable Energy Limited. Through this Tata Power will raise Rs 4,000 crore to set up India’s most comprehensive renewable energy platform, explained the firm.

“BlackRock Real Assets, together with Mubadala, shall invest Rs 4,000 crore (~US$ 525 million) by way of equity / compulsorily convertible instruments for a 10.53% stake in Tata Power Renewables, translating to a base equity valuation of Rs 34,000 crore,” noted Tata Power in an official statement.
The final shareholding will range from 9.76 per cent to 11.43 per cent on final conversion, it added.
Commenting on the investment, Praveer Sinha, CEO and Managing Director, Tata Power Company Limited, said, “Tata Power Renewables is an industry leader with a broad and deep portfolio of next-generation renewables businesses well placed to scale up rapidly based on its strong and consistent performance over the years”.
“I am delighted to welcome BlackRock Real Assets & Mubadala to join us to take the renewables business to the next level of growth. The collaboration will support us to pursue exciting opportunities that lie ahead in the coming decades,” he added.

This new platform will consist of five distinct businesses that will deliver long-term, customer-oriented solutions. It will house all renewable energy businesses of Tata Power including those in: Utility Scale Solar, Wind & Hybrid Generation assets; Solar Cell & Module Manufacturing; Engineering, Procurement and Construction (EPC) contracting; Rooftop Solar infrastructure; Solar Pumps and Electric Vehicle Charging infrastructure.

The broad-based portfolio of assets ensures diversified yet stable revenue sources including 25-year fixed-price PPAs for grid connected utility scale projects.

The proposed investment is expected to fund Tata Power Renewables’ aggressive growth plans. Over the next five years, Tata Power Renewables aims to achieve a portfolio of over 20 GW of renewables assets and a market-leading position in the rooftop and electric vehicle charging space across India.

The consortium of BlackRock and Mubadala will be getting a seat on the company’s board. The Rs 4,000 crore amount will take care of Tata Power’s CAPEX requirements for the next two years.

The first round of capital infusion is expected to be completed by June 2022 and the balance funds will be infused by end of calendar year 2022. Moelis & Company is the financial advisor to Tata Power, while JP Morgan is the financial advisor to BlackRock Real Assets. Cyril Amarchand Mangaldas & Co are legal advisors to Tata Power while Slaughter & May and AZB Partners are legal advisors to BlackRock Real Assets.

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