JSW Energy unit to buy Mytrah Energy's renewable assets for Rs 10,530 cr

The Sajjan-Jindal-led JSW Energy on Wednesday said its arm JSW Neo Energy has agreed to buy Mytrah Energy’s 1.75-gigawatt (Gw) rene¬wable energy assets for Rs 10,530 crore in its largest deal, so far. This is the third-biggest acquisition in the renewable energy space in India.

If the deal goes through, it will take JSW Energy’s operational generation capacity by over 35 per cent to 6.53 Gw, from 4.78 Gw currently. The deal is subject to approval from the Comp¬etition Commission of India, the firm said.

The top two deals in the sector are Adani Green's acquisition of SB Energy India, owned by SoftBank and Bharti Enterprises, in 2021 for nearly Rs 25,566 crore, and ReNew Power's acquisition of Ostro Energy for Rs 10,800 crore in 2018.

In a conversation with Business Standard last week, JSW Energy's Joint MD and CEO, Prashant Jain, said that the company was looking at inorganic growth to fuel its business. "Inorganic growth is an important part of our overall strategy. It will allow us to grow quickly. Wherever we see value accretion for all stakeholders, we will evaluate those opportunities from an acquisition perspective,” he said.

JSW Energy had signed an exclusivity pact with Mytrah Energy in May to acquire its assets. On Wednesday, the company said that it was picking up 10 wind assets as special purpose vehicles (SPVs) and seven solar SPVs from Mytrah Energy as part of the deal.

The wind assets have a generation capacity of 1.33 Gw and the solar power assets have a generation capacity of 0.42 Gw, operating primarily in the southern, western, and central parts of India.

Jain said the Mytrah transaction would help the company achieve its 10-Gw capacity target ahead of its 2025 timeline. The company has around 2.5 Gw of capacity currently under construction, which shall come on stream in the next 18-24 months.

This, along with its enhanced operational capacity of 6.53 Gw, thanks to the Mytrah acquisition, shall take its total capacity to 9.1 Gw in two years, where the share of renewable energy (in terms of capacity) shall increase to 65 per cent. Its current share of renewable energy capacity is 30 per cent.

KPMG India Services was the transaction advisor to the company, while Khaitan & Co was the legal advisor; PricewaterhouseCoopers Services carried out financial and tax due diligence.

This capacity expansion push by JSW Energy comes amid heightened competition in the industry. Rivals, such as the Adani Group, Tata Power, and Reliance Industries (RIL), have all committed significant resources to their green energy portfolios over the next few years.

Tata Power recently said that it plans to spend Rs 75,000 crore to expand the capacity of its renewable energy business over the next five years. While RIL committed Rs 75,000 crore last year to renewable energy as part of a three-pronged strategy to grow its green energy business in three years, Adani Enterprises said it would invest $20 billion (Rs 1.48 trillion) over 10 years in the renewable energy sector.