Abu Dhabi Future Energy Company PJSC, also called as Masdar, one of the largest developers of renewable energy in the Middle East, is picking up a smaller stake in the renewable energy company Hero Future Energies Pvt. Ltd possessed by Rahul Munjal of Hero Group, rendering to a filing made to the Competition Commission of India (CCI).
The offer was filed for a consent from CCI on 28 October under the green channel route for mergers & acquisitions, which permits fast and automatic approvals for clean energy projects.
The transaction will see Masdar pick up equity stake in overseas units that control Hero Future Energies Pvt. Ltd, as well as subscribing to non-voting forcibly convertible preference shares in the company.
While further details of the deal could not be ascertained, The Economic Times reported on 2 October that Masdar may purchase a 20% stake in Hero Future Energies for $150 million.
Hero Future has presence across 10 states in India with a working asset base of approximately 1,200 megawatts (MW) across wind, solar (grid connected) and rooftop plant life. In 2017, it had upraised $125 from International Finance Corp.
The Masdar-Hero deal marks a rare entry of a new development equity investor in an Indian renewable energy producer in current times.
The segment has been going through a phase of consolidation, with lack of low cost capital availability forcing small renewable energy creators to sell assets to bigger well established platforms funded by financial investors such as secluded equity, sovereign wealth funds and pension funds.