By Business India Editorial

JSW Energy is planning to raise $500 million through a strategic stake sale in its green energy business, according to media reports.

“We have launched a formal process. With the current traction towards green energy assets, we hope to get better traction for the subsidiary,” said one of the sources in the report.

The Sajjan Jindal Group company is looking to catch up with peers such as Tata Power and Adani Power that have stepped up investments into non-conventional energy.

This will be in addition to a $700-million green bond which JSW Hydro Energy raised earlier this year. JSW Energy has renewable businesses including hydro, wind and solar, which collectively form about 30 percent of the power business.

The proceeds of the sale would be used to boost generation of non-conventional power. It is believed that feelers have been sent to alternative energy focused financial investors, pension and sovereign asset managers and big ticket private equity firms.

It has been reported that the company has hired Morgan Stanley to run a formal process.

It is learnt that by financial year 2025, renewables are estimated to be over two-third of the company’s portfolio with thermal power reducing to 32 per cent. The company projects an 18 per cent CAGR growth in power generation until FY30. It has a total capacity of 4.6 GW with over one-third of it coming from non-conventional energy. Total capacity is anticipated to be 20GW by FY30 as green energy is likely to emerge as the flagship business with 84 per cent share.

India’s renewable energy landscape is witnessing acquisitions and expansions by large corporate groups and private equity-backed energy platforms. Earlier, French oil and gas major Total SE picked up a stake in Adani Green. In October, Reliance Industries has bought out Norway-based solar panel manufacturer REC Solar Holdings for around $771 million and acquired 40 per cent stake in Shapoorji Pallonji Group’s Sterling & Wilson Solar. 

At present, India’s installed renewable energy capacity is about 95 GW, including 40.5 GW of solar power. Capacity addition is expected to be 10.5-11 GW in financial year 2021-22, led by a strong project pipeline of about 38 GW, according to ratings firm ICRA. The sector is expected to witness investments of Rs5 lakh crore over the next four years, increasing its share to 34 per cent of the overall installed power generation capacity by March 2025 from 25.