According to two people with knowledge of the situation, Mahindra Susten’s renewable infrastructure investment trust (InvIT) is up for investment of up to $250 million (2,080 crore) from the World Bank, the Asian Infrastructure Investment Bank (AIIB), and Dutch pension fund APG Asset Management.
APG was one of many international investors who had expressed early interest in funding the Mahindra InvIT.
The Mahindra Group’s engineering, procurement, and construction (EPC) unit, which has built more than 4 GW of capacity, and an independent power production (IPP) unit, which has roughly 1.54 GW of operational solar plants, are both part of Mahindra Susten. The InvIT will receive the complete 1.54 GW. According to the sources, the portfolio has an enterprise value of roughly $1 billion.
One of the individuals stated, “APG, IFC, and AIIB are currently conducting due diligence on the assets that are part of the InvIT.” “In the next two to three months, the deal is likely to close.”
“It will include a mix of primary and secondary share sales for a minority stake of around 35% in the InvIT,” the source said.
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Other news on the Mahindra InVIT, AIIB, and APG Deal:
One of the individuals stated that adding a new investor will also assist the InvIT in moving closer to achieving standards that call for an InvIT to have a minimum of five shareholders. In order to achieve the minimal shareholder criteria, “Susten will later bring in a few domestic investors such as mutual funds or family offices with small checks,” the source claimed.
About 30% of Mahindra Susten is currently owned by the Canadian fund Ontario Teachers’ Pension Plan Board (OTPP), which purchased the company in September 2022 for Rs. 2,371 crore ($300 million). Along with its ownership in Mahindra Susten, OTPP will ultimately own a portion of the InvIT.
Inquiries to the Mahindra Group and AIIB went unanswered. IFC and APG chose not to comment. Mahindra Susten is receiving advice on the transaction from Axis Capital, Kotak Investment Bank, and Avendus Capital.
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