Tata Power Renewables to get Rs 4,000 crore Investment from BlackRock, Mubadala

Tata Power Renewable Energy Ltd has raised Rs 4,000 crore to build a comprehensive platform to achieve its renewable sector ambitions in India. In a statement filed with exchanges, it has shared that a binding agreement has been signed by Tata Power and the BlackRock Real Assets-led consortium under which BlackRock will invest in Tata Power Renewable Energy.

The statement read, “BlackRock Real Assets, together with Mubadala, shall invest ₹4,000 crore ($525 million) by way of equity / compulsorily convertible instruments for a 10.53% stake in Tata Power Renewables, translating to a base equity valuation of ₹34,000 crore.”

As per the filing, the first round of capital infusion is expected to be completed by June 2022 and the balance funds will be infused by the end of calendar year 2022. It stated, “The final shareholding will range from 9.76% to 11.43% on final conversion.”

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As per the statement, the new platform will have five businesses of RE sector that will offer long term and customer oriented solutions. All Tata Power Renewable Energy businesses will be hosted by this platform only – Utility Scale Solar, Wind & Hybrid Generation assets; Solar Cell & Module Manufacturing; Engineering, Procurement and Construction (EPC) contracting; Rooftop Solar infrastructure; Solar Pumps and Electric Vehicle Charging infrastructure.

Tata Power Renewables maintains a portfolio of about 4.9 GW of renewables in India at present. The company statement also added that Tata Power Renewables is targeting a portfolio of 20 GW of renewables assets in the coming five years. This is also meant to take the company to a market-leading position in the rooftop and electric vehicle charging segment in the country.

“I’m delighted to welcome BlackRock Real Assets and Mubadala to join us to take the renewables business to the next level of growth. Tata Power Renewables is an industry leader with a broad and deep portfolio of next-generation renewables businesses well placed to scale up rapidly based on its strong and consistent performance over the years,” said Praveer Sinha, CEO and MD, Tata Power Company Ltd.

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He also added, “The collaboration will support us to pursue exciting opportunities that lie ahead in the coming decades.”

Khaled Abdulla Al Qubaisi, CEO, Real Estate and Infrastructure Investments at Mubadala stated, “As a responsible investor, Mubadala is focused on renewable energy in multiple markets, so we are delighted to invest in Tata Power Renewables to support energy transition efforts in India in partnership with Blackrock Real Assets.”

Anne Valentine Andrews, Global Head of Real Assets, BlackRock, said, “Tata Power Renewables is at the forefront of India’s ambition to secure greater energy stability for its citizens. It is also positioning its economy for a low carbon future. India’s success in transitioning its energy economy will be crucial to the world’s ability to meet its climate goals.”

The investment by the new investors is at a premium to the last valuation done by Tata Power’s, and is seen as an alternate option to the earlier plan to float an InvIT (Investment Trust) to monetise its renewable assets effectively.