Aditya Birla group, KKR left in race for Sprng Energy

The Aditya Birla Group and private equity firm KKR are in a two-horse race to acquire Sprng Energy from oil giant Shell after binding financial bids were submitted by four contenders interested in acquiring the renewable energy company on May 2, according to people aware of the matter.

Having emerged as the two highest bidders, Shell's management will start negotiations with Aditya Birla and KKR by next week after two internal committees at the London-headquartered company complete their screening process, they said.

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India's National Investment and Infrastructure Fund (NIIF) and private equity firm Actis, which had also submitted binding financial bids, are no longer in the reckoning, as per the people cited. The acquisition could be pegged at an enterprise value of about $2 billion, they said.

Sprng Energy has a renewable energy generation portfolio of 5 gigawatts and its output is contracted to reliable counterparties such as state-owned entities in India. The company was incubated by Actis, which sold it to Shell in 2022.

"Shell confirms it is in initial discussions with potential partners interested in our Sprng business. It is too early to comment on an outcome of these discussions," a company spokesperson said.

Aditya Birla's spokesperson was unavailable for comment. KKR declined to comment.The sale plans are the result of a strategic rethink at the oil company whose shareholders are said to be nudging it to focus more on the core business of exploration and production.ET was first to report on October 8 last year that Shell had engaged investment bank Barclays to advise on the sale of Sprng Energy.

Aditya Birla announced on December 9 last year that Global Infrastructure Partners-Blackrock had invested ₹3,000 crore in its renewable energy arm. KKR has investments in renewable energy in India through stakes in Serentica Renewables and Hero Future Energies. BlackRock took over Global Infrastructure Partners (GIP) in 2024.

ET had first reported on January 8 that NIIF, KKR and Sembcorp were in the race for Sprng Energy after they submitted non-binding offers in the last week of December. ET was also first to report on January 31 that Aditya Birla had entered the race.

Sprng Energy is a wholly owned entity of Mauritius-based Solenergi Power, which is in turn 100% owned by Shell Overseas Investment BV.

Its renewable power generation portfolio includes a combination of wind and solar power projects in states such as Tamil Nadu, Karnataka, Gujarat, Rajasthan and Madhya Pradesh. It has long-term power purchase agreements with NTPC, NHPC, Solar Energy Corporation of India (SECI) and state-owned power distribution companies.

Shell has varied business interests in India, including selling lubricants, running an LNG terminal at Hazira port, and operating fuel retailing and electric vehicle charging stations.

The renewable energy sector has witnessed steady mergers and acquisitions activity as conglomerates, private equity investors and state-owned companies make a beeline for greener sources of power that are becoming cost-effective and can help them meet decarbonisation targets.

Over the past two years, major deals have been announced, including ONGC-NTPC’s purchase of Ayaana Renewable Power for $2.2 billion, private equity firm TPG’s purchase of Siemens Gamesa’s wind turbine manufacturing operations in India, global steelmaker Arcelor Mittal doubling its renewable energy investments with an additional $900 million to name a few.