Japanese Financial Group Orix To Invest Rs 7200 Cr In Greenko for 20% stake

Diversified Japanese financial conglomerate, has made the largest single renewable energy investment into India, with a $980 million ( Rs 7200 crores) on renewable major Greenko Group Holdings. The deal is expected to be closed by the end of the year.

The Tokyo based firm had $23.6 billion in reported revenues last year, making the Greenko bet one of its largest investments anywhere outside Japan.

For the Hyderabad-based Greenko Group, founded by Anil Kumar Chalamalasetty and Mahesh Kolli in 2004, the investment by Orix follows previous investments from sovereign wealth funds GIC Investment of Singapore, and the Abu Dhabi Investment Authority, that have together pumped in over $2.2 billion in the firm. While GIC owns 65.8 percent in the firm, ADIA owns 16.5 percent. After the transaction closes, the promoters are expected to be left with around 13 percent stake in the firm.

Orix, according to its statement, will integrate its existing wind energy business (873 MW) with Greenko, as part of the transaction, where it will be buying most of its stake from the promoter’s equity, besides a fresh issue of shares. The deal will make Greenko the second most valuable renewable energy firm in the country with a valuation of over $6 billion, after the publicly listed Adani Green Energy, which has had a spectacular run on the equity markets recently, to take its own valuation to almost $13 billion. French energy major Total is the major partner at Adani Green Energy.

Greenko, with an existing capacity of 4 GW, and a pipeline of over 8 GW, was probably one of the few firms that offered an opportunity to invest a significant amount, to the Japanese firm. The firm, with projects across multiple states, has been particularly ell placed in its home state of Andhra Pradesh, where it remains one of the few renewable energy firms to come out of a spat with the new state government without losing its shirt in the bargain.

Greenko seems to be a beneficiary of the search across the world for quality renewable energy assets at scale, and markets that can house them. India, with its 175 GW target for 2022, and a further plan to go for 450GW by 2030, clearly ticks those boxes for Orix now.

With this transaction the foreign capital role in India’s top 3 RE firms becomes even more pronounced, with the Goldman Sach’s backed Renew Power,  The Greenko Group and its three foreign backers, and of course, Total for Adani. Some might actually say, who needs IPO’s when you have so much interest in the sector?