Delay in Greenko stake sale as weak markets, low valuations weigh

RE projects valuations take a hit due to volatile stock markets

Singapore’s sovereign wealth fund GIC is encountering delays in offloading its 58 per cent stake in Greenko Energy, as turbulence in equity markets and shifting valuations in the renewable energy sector weigh on potential deal momentum, according to people familiar with the matter.

 

 

The firm has approached several players, including the JSW group, to sell the stake at a valuation of $4.2 billion, according to bankers.

 

Greenko Energy is one of India’s leading renewable energy companies, with a net installed capacity of 11 gigawatt across 20 states, according to information posted on its website. When contacted, GIC and JSW group declined to comment.

 

 

A source in JSW group said that the group was busy with the acquisitions of KSK Energy for ₹16,000 crore and O2 Power for ₹12,468 crore, and a greenfield 1,600 megawatt power plant at Salboni, West Bengal, and hence was not looking to acquire any new assets.

 

The stake was put on the block in October last year by GIC at a reported valuation of $5 billion. One of the potential bidders said that the bankers had approached it for a sale but the valuation was considered too high as the stock markets were falling since September last year.

 

In January this year, Orix Corporation of Japan sold its 20 per cent stake in Greenko Energy Holdings to the founders-owned A M Green Power B V for $1.46 billion. Apart from Orix and GIC, other shareholders of Greenko Energy are the Abu Dhabi Investment Authority, which owns 14.5 per cent, and founders of the company who own the rest.

 

 

GIC started investing in India more than 30 years ago. The sovereign wealth fund has doubled its exposure over the past five years, making it one of the country’s largest investors. Its financial services exposure alone is at $20 billion. The fund is also active in real estate and infrastructure, the consumer space, telecom, technology, and healthcare.