New Delhi: Private equity and venture
capital investments in the country`s renewable energy space
totalled USD 527 million during the past four years,
accounting for nearly a fourth of the total transaction
"PE,VC players have invested USD 527 million in the
country`s renewable enrgy sector-- 24 per cent of te total
transaction value in India for the period January 2005-July
21, 2009," global consultancy firm Ernst &Young said.
During the four-year period, the merger and acquisition
and PE/VC activity in India`s renewable energy space stood at
USD 2.15 billion. The average deal size stood at USD 69.5
million during the same period.
"The recent years have seen the emergence of several
funds with clean tech themes, Venture capital backed
development companies are being set up to aggregate assets in
India, " Ernst & Young (Partner and Transactions Advisory
Leader for Infrastructure, Real Estate and Government) Kuljit
In terms of number of PE/VC deals, there were about 20
such deals between January 2005 and 21 July 2009, out of the
total number of transactions which aggregated to 37, the
report said, adding the PE/VC players are chasing up the
innovative players, while several funds with specific
renewable energy mandates have contributed to the transaction
The PE/VC transactions activity peaked in 2008, with USD
301 million worth of investments. However, the activity has
slowed down during the current year due to the global
financial and credit crisis. Till July this year, there has been PE/VC deals totalling USD 49.1 million.
"In the near time frame, a significant number of assets
are expected to change hands with some of the existing project
owners refocusing efforts on core areas, raising finances by
selling non-core assets and de-leveraging balance sheet in
case of assets which are on the balance sheet of the main
company," Singh added.
The top five PE /VC deals during the period include UK`s
CDC Group Plc on association with other funds acquisition of
6.5 per cent stake in Moser Baer Photo for USD 93.6 million,
followed by IDFC Private Equity`s acquisition of 17 percent
stake in SE Forge for USD 86 million.
The report noted that the country has "immense Renewable
Energy (RE) potential, which, if harnessed, can help it
control its emissions, without compromising on its economic
growth, and also bridge the supply deficit to an extent."
Some of the significant M&A transaction during the peroid
include wind power major Suzlon`s USD 1.33 billion acquisition
of REPower, which accounts for 61.6 percent of transaction
activity in value. Another significant transaction was Gammon
India`s acquisition of a 50 percent stake in Sofinter for USD