Motilal Oswal commits Rs 1,500 crore to Inox Clean in hybrid private credit deal

Motilal Oswal Group has committed Rs 1,500 crore to Inox Clean Energy Ltd, the renewable energy platform of the INOXGFL Group, in a structured private credit transaction that will fund acquisitions and other growth initiatives as the company scales up its renewable power generation and solar manufacturing businesses.

The initial Rs 1,000 crore has already been deployed, with the remaining Rs 500 crore expected to be drawn in the coming weeks as identified acquisitions and capex plans progress. The investment is being made through compulsorily convertible debentures (CCDs).

“The transaction is structured as hybrid capital, combining debt like downside protection with an equity linked upside,” said Rakshat Kapoor head private credit at MO Alternates. “The CCDs are expected to convert into equity when Inox Clean accesses the capital markets and we are targeting an exit through an eventual initial public offering.”


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Inox Clean had filed a draft red herring prospectus last year but subsequently withdrew it. The company is now expected to remain on a public-market path, with an IPO potentially taking place over the next 12-24 months, the people said.

For this transaction, the initial Rs 1,000 crore has been funded from its Motilal Oswal's private credit balance sheet, with co-investors potentially coming in at a later stage.

The deal carries a targeted return in the mid-teens range, with the ultimate return also linked to the valuation at which the CCDs convert into equity. It includes a floor value for the equity, providing downside protection.

The funding comes as renewable energy platforms in India are consolidating rapidly, with larger players acquiring operating assets and development pipelines built by smaller private equity-backed platforms.

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Inox Clean's immediate use of funds includes financing the acquisition of a portfolio from Vena Energy, with the overall transaction valued at about Rs 6,000 crore. The acquisition is being funded through a combination of operating company debt and equity, with Motilal Oswal's capital forming part of the equity funding. The remaining Rs 500 crore commitment could also be used for other acquisitions and greenfield or brownfield capex currently under discussion.

The investment follows a Rs 700 crore equity investment in Inox Clean by the Adar Poonawalla Family Office. Other investors in the platform and its subsidiaries include CalPERS, RJ Corp, Hero Group, Authum Investments, Akash Bhansali and other family offices and high-net-worth investors.

Inox Clean has expanded rapidly through both organic growth and acquisitions. Its renewable platform includes independent power generation across wind, solar and hybrid projects, besides solar module and cell manufacturing in India and the US. It has also acquired renewable assets and platforms backed by investors including BlackRock-owned Global Infrastructure Partners, Macquarie-owned Vibrant Energy, SHV-backed SunSource Energy and CalPERS-backed SkyPower.