Mahindra, Ontario Teachers’ Co-Sponsor 2262.8 Crore Renewable Project

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Mahindra Group, a farm equipment, utility vehicles, information technology and financial services businesses in India, and Ontario Teachers’ Pension Plan Board (Ontario Teachers’), an institutional investor, have co-sponsored an Infrastructure Investment Trust (InvIT) in the renewable energy space.

The InvIT, ‘Sustainable Energy Infra Trust’ (SEIT), is India’s InvIT in the renewable energy space. SEIT has raised primary capital of INR 1365 Crore (USD 165 Million) as part of the initial offer of units (Offer). The Offer was subscribed by marquee global and Indian investors, including Asian Infrastructure Investment Bank (AIIB). With this, SEIT made its debut on the National Stock Exchange of India Limited. 

As announced earlier, and in line with the commitment made by Mahindra Group and Ontario Teachers’, SEIT has been set up to focus on the growth of the renewable energy sector in India at scale. SEIT holds operational renewable power assets seeded by Mahindra Susten with a generation capacity of approximately 1.54 GWp.

The capital of INR 897.8 Crore (USD 108 Million) made available to Mahindra Susten by way of an offer for sale of units of SEIT as a part of the Offer will position Mahindra Susten for the next level of growth and development of a future pipeline of renewable energy assets. Mahindra Susten and SEIT, as a part of their growth strategy, have entered into a Right Of First Offer (ROFO) arrangement, in compliance with InvIT Regulations, whereby renewable energy assets developed by Mahindra Susten will be offered for sale to SEIT. As previously announced, both Mahindra Group and Ontario Teachers’ had committed to invest up to INR 3050 Crore (USD 368 Million) and INR 3550 Crore (USD 428 Million) respectively into Mahindra Susten and SEIT.

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Anish Shah, Group Chief Executive Officer (CEO) & Managing Director (MD), Mahindra Group, said, “The Government of India has laid down ambitious targets to reduce the carbon intensity of the nation’s economy by 45% by the end of the decade and achieve net-zero carbon emissions by 2070. The listing of SEIT is a testament to the Group’s ability to attract strong external investors. Mahindra Susten has ambitious plans to achieve 5X growth in the next five years and will contribute to both the Groups’ and the nation’s green energy goals. The renewable energy sector will continue to grow and attract investments and we are excited about both Susten’s and SEIT’s role in developing the right ecosystem.”

Deb Hajara, Managing Director, Infrastructure & Natural Resources at Ontario Teachers’ added, “We are proud to co-sponsor the SEIT alongside our partner Mahindra Susten and to contribute to India’s renewable energy ambitions. This milestone not only reinforces our commitment to invest globally in green and transition assets but also demonstrates the attractiveness of renewable energy investment opportunities in India.”

Avinash Rao, Chief Executive Officer (CEO) of the Investment Manager to SEIT, commented, “Renewable energy is a core sector for India with significant growth potential. The Government’s focus on renewable and sustainable energy makes the industry attractive for investments thereby enabling further growth of our portfolio. An InvIT as an instrument is investor friendly and attracts significant interest in operating renewable energy and infrastructure investments in India. We are delighted to have strong sponsors such as Mahindra Group, Ontario Teachers’ as well as AIIB and other marquee investors on board for current assets, and for building our pipeline of future assets.”

Kotak Mahindra Capital Company Limited, Axis Capital Limited and Avendus Capital Private Limited acted as Placement Agents to the transaction. Cyril Amarchand Mangaldas acted as legal counsels to SEIT and the Sponsors. S&R Associates acted as legal counsels to the Placement Agents.