JSW Energy on Wednesday said its arm JSW Neo Energy will acquire 1,753 MW of renewable energy generation capacity from Mytrah Energy for Rs 10,530 crore.
JSW Neo Energy, a wholly-owned subsidiary of JSW Energy, has agreed to acquire a portfolio of 1,753 MW of renewable energy generation capacity -- comprising 17 SPVs and one Ancillary SPV -- from Mytrah Energy (India) Private Limited, a statement said.
Necessary definitive agreements have been signed between the parties, it added.
The transaction is subject to the approval of the Competition Commission of India (CCI) and other customary approvals standards for a transaction of this size.
The transaction values the Mytrah Energy portfolio at an enterprise valuation of approximately Rs 10,530 crore after adjusting for net current assets, as per the statement.
The Mytrah portfolio consists of 10 wind SPVs with a generation capacity of 1,331 MW and 7 solar SPVs with a generation capacity of 422 MW (487 MWp DC), operating primarily in the southern, western and central parts of India.
The assets have a proven operational track record and long-term PPA (power purchase agreement) with an average remaining life of 18 years.
This is the largest acquisition made by JSW Energy since its inception, and will leapfrog the current operational generation capacity by over 35 per cent -- from 4,784 MW to 6,537 MW, the statement said.
With about 2,500 MW of under-construction wind and hydro projects that are likely to be commissioned in phases over the next 18-24 months, JSW Energy platform capacity gets enhanced to 9.1 GW – where the share of renewables increases to 65 per cent.
Further, this is likely to help the company in achieving its renewable-led capacity growth target of 10 GW by FY25, well ahead of timelines.
KPMG India Services LLP was the transaction advisor to the company, while Khaitan & Co was the legal advisor, and PricewaterhouseCoopers Services LLP carried out financial and tax due diligence.
"We are excited to acquire Mytrah’s 1.75 GW of the renewable energy portfolio, which is value accretive to our shareholders on day one. This landmark deal demonstrates our strong commitment to achieve our vision of achieving 10 GW capacity by 2025 and being a leading player in India’s Energy Transition," Prashant Jain, Joint Managing Director and CEO of JSW Energy, said.
This acquisition further strengthens and diversifies the operating footprint across various key resource-rich states, he added.
"We also believe that by leveraging our strong industry, operating and financing expertise, we would be able to significantly improve the operating performance of this entire portfolio, which will ultimately create tremendous value for our shareholders. JSW Energy will continue to look for more such opportunities for value accretive acquisition to aid its already ambitious growth plans for this sector.
"This provides a fillip to the company's growth aspirations and aligns with our renewable-led growth philosophy. Aside from generation, we also continue to pursue our organic pursuit of storage as well as green hydrogen and its derivatives play," Jain said.
The acquisition of Mytrah’s portfolio by JSW Energy is significantly value-accretive and consistent with the firm's long track record of being prudent in capital allocation and focusing on high cash returns, Pritesh Vinay, Director (Finance) and CFO of JSW Energy, said.
"We have a multi-pronged asset optimisation, performance improvement and capital structure optimisation plan over the next 12-24 months – which will drive significant value creation over the life of the assets. Moreover, the balance sheet headroom even after consummating this large acquisition will give us the leeway to continue to pursue our growth ambitions," Vinay added.
JSW Energy has set an ambitious target for a 50 per cent reduction in its carbon footprint by 2030 and achieving carbon neutrality by 2050 by transitioning towards renewable energy.
It has also set a target to reach 20 GW capacity by 2030, with the share of renewable energy increasing to 85 per cent.
Around 2.2 GW of renewable energy projects are currently under construction, and wind projects of 1.26 GW tied with SECI, are expected to be fully commissioned in the next 12-18 months.
With the acquisition of Mytrah Energy's 1.75 GW, the total platform capacity will increase to 9.1 GW.
JSW Neo Energy is a vehicle formed as a part of the re-organisation of business to own all the renewable/green and new energy businesses.