This, arguably, is one the biggest private equity funding in recent times in wind energy space. Caparo Energy India, a wholly-owned subsidiary of Caparo Energy, is understood to have mandated investment bankers to raise $150 million (Rs 700 crore) through the private equity route.
The company, which is into wind power generation in India, is putting in place an aggressive expansion plan. It is charting a two-phased expansion plan, which will see them generate upto 5,000 Mw over the next six years. The first phase will see a generation capacity of 3,000 Mw in another five years, while the other 2,000 Mw will be produced in the second phase.
To implement the first phase, Caparo Energy India has already entered into an agreement with Suzlon Energy, to acquire up to 3,000 Mw of wind power generation farms. According to investment bankers close to the deal, the fresh round of equity raising will be used for this expansion. In January, Caparo Energy signed a record Rs 5,700 crore deal with Suzlon Energy to generate 1,000 Mw energy in the future.
The initial projects, totalling 100.8 Mw, are to be located at sites in Rajasthan, Gujarat and Maharashtra, and scheduled for delivery by the fourth quarter this year. A cumulative 500 Mw is to be commissioned progressively by March 2012 and a further 500 Mw by March 2013.
Caparo has made advance payments of Rs 226 crore to Suzlon and it has agreed to make a subsequent advance payment of Rs 120 crore to the latter in July 2011. Thereafter, further payments will be made on an ongoing basis through the agreed roll-out period.
The company is also in advanced discussions to acquire land and turbines from international vendors in connection with wind power farm development in wind-rich states including Karnataka, Maharashtra, Tamil Nadu and Andhra Pradesh. "This should provide both geographic and customer-base diversification to the Group’s portfolio and that these sites will, if and when acquired, be suitable for installing an additional 2,000 Mw of capacity by 2017," the company said.
Caparo Energy did not respond to query on PE fund raising.
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The AIM-listed company, with a market capitalisation of Rs 1,400 crore, was founded in November, 2008 by Angad Paul, chairman Caparo Energy Limited and Ravi Kailas, chief executive officer, Caparo Energy Limited.
Caparo Energy’s investors include some of the largest funds in the world — Henderson, Eton Park, Capital International, and Black Rock. In India, it is headquartered at Hyderabad.
According to industry estimates the overall capacity addition from wind energy companies in India would be 5,000 Mw a year in the next few years. In 2010-11, a little over 2,300 Mw of wind energy capacity came up, an all-time high.
A lot of players are gearing up to generate wind power making India the fifth largest in the world in terms of wind power installed capacity. Wind energy accounts for 72 per cent of India’s renewable energy capacity and the growth reflects the increasing demand for alternative energy, given that the country faces a significant energy shortage, with demand far outstripping supply. This has attracted a lot of interest from private equity players and an estimated $400 million was invested in clean energy during the past year.