JSW Group plans to sell minor stake in Neo Energy for $500 m

JSW Group is looking to sell a minority stake in JSW Neo Energy, a subsidiary of listed JSW Energy, to raise up to $500 million, people aware of the development told ET.

The steel and energy conglomerate has appointed Standard Chartered Bank as the sell-side advisor for the transaction, one person said, asking not to be named as the discussions are private. TPG's The Rise Fund, which invests in clean energy companies, is one of the interested bidders. The fund had earlier invested $1 billion in Tata Motors' electric vehicles arm.

Proceeds from the fundraise are expected to be utilised towards expanding the company's renewables energy footprint, people cited above said. A JSW Energy spokesperson declined request for comment. Email queries sent on Monday to Standard Chartered and TPG remained unanswered until press time. The proposed fundraise comes at a time when energy companies across the board are seeking investments for their green energy businesses.

Aditya Birla Group is looking to sell up to 49% stake in the group's renewable energy business to raise around $400 million, as per reports. It has also enlisted Standard Chartered as its investment banker. Meanwhile, the board of Adani Green Energy is expected to be convening soon to consider a proposal to raise between $750 million and $1 billion through a stake sale, ET reported earlier.

JSW Neo Energy will be housing JSW Energy's projects in renewable energy - across generation, energy storage and green hydrogen. The company's operational hydro energy projects and all upcoming renewable energy projects will be housed in subsidiaries under JSW Neo Energy, the company had said earlier.

This move will help JSW Energy in building and streamlining its renewable portfolio and setting up a holding structure which is efficient for fundraising and unlocking value for shareholders, the company said. JSW Neo Energy recently acquired 1.75 gigawatt of renewable energy generation capacity from Mytrah Energy for ₹10,530 crore. This includes wind energy capacity of 1.33 gigawatt and solar energy capacity of 422 megawatts, primarily in the southern, western and central parts of India.

The acquisition, the largest by JSW Energy since inception, propelled the company's operational capacity by over 36% from 4.81 gigawatt to 6.56 gigawatt. The company has a target of achieving 10-gigawatt operational power generation capacity by 2025 and 20 gigawatts by 2030. Earlier, Prashant Jain, joint managing director of JSW Energy, said in an interview that the company was contemplating taking JSW Neo public.