Largest investment by a single PE investor in power sector.
US-based private equity (PE) fund Blackstone has invested $300 million (Rs 1,350 crore) in Moser Baer Projects Private Ltd (MBPPL), the unlisted energy business of Delhi-based global technology company Moser Baer India.
The investment will fund MBPPL's plans of commissioning 5,000 mega watt (Mw) of power generation capacity — 4,000 Mw of thermal power, 500 Mw of solar power and 500 Mw of hydro power — over the next six years in India and Germany. The group's 1,200-Mw Annuppur Project-1 in Madhya Pradesh, which has achieved financial closure, is the most advanced one.
The largest investment by a single PE investor in the Indian power sector will help MBPPL establish, what it called, "one of the country's leading independent power generation business".
"We have an appetite of investing $1 billion (around Rs 4,500 crore) in the power sector over the next five years, provided we get good deals," said Akhil Gupta, chairman and managing director of Blackstone Advisors India Private Ltd.
MBPPL has a 7.4-Mw operating solar farm asset in Germany and a 5-Mw solar power project under construction in Tamil Nadu. Besides, the company will invest in the country's largest solar power plant, a 45-Mw one, in Gujarat, whose financial closure is expected within a month.
"We have not done anything on the solar thermal front as yet and we will look at coal from Coal India and its subsidiaries. Our power projects will be fuelled from domestic coal," said Deepak Puri, founder of MBPPL. Moreover, Moser Baer doesn't intend to list MBPPL this year, though it is considering listing in a few years.
"We don't need more private equity and we think we will reach grid parity in three years," Puri said.
| BLACKSTONE’S INDIA INVESTMENTS | |||
| Deal | Sector | Amount invested (million $) | Year |
| Emcure |
Pharma | 49 | 2006 |
| MTAR | Engineering | 65 | 2007 |
| NCC | Infrastructure | 111 | 2007 |
| Gokaldas | Textiles/Appare | 165 | 2007 |
| Intelenet | BPO | 190 | 2007 |
| CMS | IT | 40 | 2008 |
| Nuziveedu Seeds | Agriculture | 55 | 2008 |
| Allcargo | Logistics | 81 | 2008 |
| Gateway Rail | Logistics | 68 | 2009 |
| Jagran Prakashan | Media | 51 | 2010 |
| Monnet Power | Infrastructure/Power | 60 | 2010 |
| Moser Baer | Infrastructure/Power | 300 | 2010 |
| TOTAL | 1,235 | ||
The PE fund has so far invested $1.25 billion (around Rs 5,600 crore) in 12 Indian companies. It recently secured a 12.5 per cent stake in Monnet Power Company (MPCL) for $60 million (Rs 275 crore). It also has investments in Indian companies like newspaper firm Jagran Prakashan, garment maker Gokaldas Exports, Allcargo Global Logistics, Nagarjuna Construction and Emcure Pharmaceuticals.
"The accelerated development of India's infrastructure industry in general and the power sector in particular is a pre-requisite for unlocking our country's economic potential and availability of growth capital will remain essential to enable this development. We have put together a highly qualified investment banking team to exclusively advise infrastructure companies on capital raising and mergers and acquisitions," said Venkat Ramaswamy, executive director, Edelweiss Group, which acted as the financial advisor to MBPPL.
Blackstone has said that infrastructure development continued to remain one of its key investment themes in India. Moser Baer's shares closed 6.6 per cent higher at Rs 66.45 on the Bombay Stock Exchange.
