CalPERS, Enam among investors eyeing stake in Inox Clean Energy

CalPERS, Enam and Authum Investments are among foreign and local investors close to acquiring a low single-digit stake in Inox Clean Energy for $330 million, according to people familiar with the matter. The company is engaged in renewable energy generation and solar equipment manufacturing activities.

The transaction, which underscores the continuing interest in Indian renewable energy assets, could peg the value of the unlisted Inox Clean Energy at $5-5.5 billion, said the people cited.

The investor group is said to include the California Public Employees’ Retirement System (CalPERS), which is the largest public pension fund in the US.

Others likely to participate are the Khemka family-promoted Sun Group, members of the Enam group and Authum Investments, the people said.

The fundraise could set a valuation benchmark for an initial public offering (IPO) and also provide financing for acquisitions that are completed and those that are in the pipeline, the people said.

Inox Clean Energy recently acquired Macquarie-owned Vibrant Energy, an Indian renewable energy company that supplies electricity to Amazon’s establishments in the country. It also announced the acquisition of a solar projects portfolio from SunSource Energy, an Indian arm of Netherlands-based SHV Energy.

Inox Clean Energy declined to comment. CalPERS, Enam, Sun Group and Authum Investments didn’t respond to queries.

The company carries out its renewable energy generation and solar equipment manufacturing activities through two companies — Inox Neo Energies and Inox Solar Ltd.

Its renewable energy generation arm Inox Neo Energies is targeting an installed generation capacity of 10 gigawatts by 2028. Inox Solar aims to set up 11 GW of solar module manufacturing capacity and 8 GW of solar cell manufacturing capacity within those timelines.

The company is part of the Delhiheadquartered Inox GFL Group, which has interests in fluorochemicals, battery materials manufacturing, wind and solar equipment as well as the operation and maintenance of wind farms. The group has three listed entities — Gujarat Fluorochemicals, Inox Wind and Inox Green Energy Services.

A consortium led by TPG Capital took over Siemens Gamesa's wind turbine manufacturing business in India last year. Underpinning some of these investments is the thesis that investors in renewable energy companies will be able to realise returns as the IPO market remains receptive to companies in this sector.

At a recent press release announcing Inox Clean Energy’s acquisition of Vibrant Energy, Inox GFL’s executive director Devansh Jain said the company had achieved 3 GW of renewable energy generation capacity faster than its peers and was on course to meet its 10 GW target.

IPO Plan

Inox Clean Energy had made a confidential filing for a proposed IPO in July but withdrew its draft red herring prospectus in December. In the interim, it pursued acquisitions and fundraising plans. With the current investment likely to be finalised soon, its public issue plans could be revived, said the people cited above.

India’s renewable energy sector is attracting investments from diverse players. They include those that want to use cheaper and cleaner fuel to power captive industrial activities as well as those that see an opportunity to invest in companies that generate clean energy.

For instance, global steelmaker ArcelorMittal announced in December that it was doubling its investments in renewable energy assets in India to service its captive needs. This would mean an additional $900 million investment. KKR-backed Serentica Renewables recently acquired Statkraft's India solar power assets.