BlackRock, Mubadala to invest Rs 4,000 crore in Tata Power Renewables

Tata Power Company and BlackRock Real Assets-led consortium, including Mubadala Investment Company, have entered into a binding agreement to invest in Tata Power Renewable Energy, the company's renewable energy subsidiary.

BlackRock Real Assets, together with Mubadala, shall invest Rs 4,000 crore (approximately $525 million) by way of equity / compulsorily convertible instruments for a 10.53% stake in Tata Power Renewables, translating to a base equity valuation of Rs 34,000 crore. The final shareholding will range from 9.76% to 11.43% on final conversion.

The newly created platform will consist of five distinct businesses delivering long-term, customer oriented solutions. It will house all renewable energy businesses of Tata Power including those in utility scale solar, wind & hybrid generation assets; solar cell & module manufacturing; engineering, procurement and construction (EPC) contracting; rooftop solar infrastructure; solar pumps and electric vehicle charging infrastructure.

The broad-based portfolio of assets ensures diversified yet stable revenue sources including 25-year fixed-price PPAs for grid connected utility scale projects.

Tata Power Renewable Energy (Tata Power Renewables) is one of the largest renewable energy companies in India. Its vertically integrated operations currently have approximately 4.9 GW of renewable energy assets.

Mubadala Investment Company is a sovereign investor managing a global portfolio, aimed at generating sustainable financial returns for the Government of Abu Dhabi.

BlackRock Real Assets seeks to help clients access real assets that could help meet their investment goals by providing a distinct range of well defined, outcome orientated strategies, along the investment risk-return spectrum.

The proposed investment is expected to fund Tata Power Renewables' aggressive growth plans. Over the next five years, Tata Power Renewables aims to achieve a portfolio of over 20 GW of renewables assets and a market leading position in the rooftop and electric vehicle charging space across India.

Dr. Praveer Sinha, CEO and managing director, Tata Power Company, commented: Tata Power Renewables is an industry leader with a broad and deep portfolio of next-generation renewables businesses well placed to scale up rapidly based on its strong and consistent performance over the years. I am delighted to welcome BlackRock Real Assets & Mubadala to join us to take the renewables business to the next level of growth.

The first round of capital infusion is expected to be completed by June 2022 and the balance funds will be infused by end of calendar year 2022. The transaction is subject to conditions precedent and customary regulatory approvals.

Tata Power Company is one of the largest private-sector power utilities in India, with an installed generation capacity of 13,515 megawatts. The company has presence across the entire power value chain - generation (renewable, hydro and thermal power), transmission & distribution, coal & freight, logistic, trading and consumer facing solar rooftop and electric vehicle charging businesses.

The company's consolidated net profit soared 73.3% to Rs 551.89 crore on a 43.6% jump in net sales to Rs 10,913.14 crore in Q3 FY22 over Q3 FY21.

The scrip tumbled 5.88% to currently trade at Rs 257 on the BSE.

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