IDFC Alternatives is discussing a large stake buy, possibly a controlling interest, in select wind power assets owned by Orient Green Power Company, a listed firm of the southern conglomerate Shriram Group.
The transaction could be valued up to Rs 300 crore, said banking sources directly familiar with the matter. The deal may involve IDFC buying into fully owned subsidiaries of Orient Green Power, and not into the listed parent.
Private equity arm of IDFC, managing assets worth $2.2 billion, has a significant presence in the wind power sector. The deal could be part of the consolidation play in India's renewable energy space.
IDFC owns privately held Green Infra, which operates 377MW wind power assets, mostly built through acquisitions. In August this year, it acquired TVS Energy, a renewable energy arm of TVS Motor, expanding its foot print in Tamil Nadu and Maharashtra.
Orient Green Power has existing 406MW wind power and 60.5MW biomass plants and wants to aggressively expand the portfolio to 1,000MW in the coming years. The company, however, is in the midst of a financial rejig, lining up some divestures in subsidiaries and turning to extra commercial burrowing (ECBs) to lessen the interest burden.
"Talks are on with several people. Nothing has fructified as yet. I cannot comment on the nature of discussions or the parties with whom we are talking," T Shivaraman, executive vice chairman of Orient Green Power, said. The company's share price closed 1.7% up at Rs 11 in Mumbai on Tuesday.
Investment bank MAPE is said to be advising on the deal, which is not yet definite, sources added. An external spokesperson for IDFC did not respond a query immediately.
Though India is the fifth largest renewable energy market by installed capacity, it has seen smaller standalone players struggling to stay afloat in a capital-intensive sector where the tariffs are tightly controlled by governments.