Ontario Teachers’ Pension Plan Board will acquire a 30 per cent stake in Mahindra Susten Private Limited at an equity value of ₹2,371 crore.
The proposed transaction also envisages the setting up of an Infrastructure Investment Trust (InvIT) in compliance with applicable regulations of the Securities and Exchange Board of India. The InvIT is initially proposed to comprise renewable power assets seeded by Mahindra Susten with an operational capacity of around 1.54 GWp.
As part of the proposed transaction, shareholder loans of ₹575 crore advanced by Mahindra Group to Mahindra Susten will be repaid. As a result of this transaction, Mahindra Group will receive an inflow of approximately ₹1,300 crore. Mahindra Group and Ontario Teachers’ will jointly explore the sale of an additional 9.99 per cent stake in Mahindra Susten by May 31, 2023.
Mahindra Group will deploy these funds, plus an incremental amount of up to ₹1,750 crore into the business and InvIT over the next seven years. Over the same period, Ontario Teachers’ has committed to deploy an additional amount of up to ₹3,550 crore.
Deepak Thakur, Managing Director & Chief Executive Officer, Mahindra Susten, said, “This partnership with Ontario Teachers’ syncs with Mahindra Susten’s plan to substantially grow our green energy portfolio across solar PV, wind, and energy storage. This platform will leverage our proven experience in development and deep knowledge of the Indian energy market.”
‘Poised for significant growth’
Chris Ireland, Senior Managing Director, Greenfield Investments & Renewables, Infrastructure & Natural Resources at Ontario Teachers’, said, “We are proud to invest in one of India’s leading renewable energy platforms. We believe the renewable energy sector is poised for significant growth in the coming years as India works towards its ambitious clean energy goals, and we are excited to partner with the Mahindra Group in this initiative.”
It is expected that the acquisition will be completed over the next few months. The InvIT is also expected to be formed during FY2024 subject to requisite approvals.