Acquisition of 1.75 GW of Renewable Portfolio of Mytrah Energy

JSW Neo Energy (‘JSW Neo’), a wholly owned subsidiary of JSW Energy (‘The Company’) has agreed to acquire a portfolio of 1,753 MW of Renewable Energy generation capacity from Mytrah Energy (India) Private Limited comprising of 17 SPVs and 1 Ancillary SPV. Necessary definitive agreements have been signed between the parties. The transaction is subject to approval of the Competition Commission of India (CCI) and other customary approvals standard to a transaction of this size. The transaction values the Mytrah Energy portfolio at an Enterprise Valuation of approximately ₹10,530 Crores, after adjusting for net current assets.

The Mytrah Portfolio consists of 10 Wind SPVs with a generation capacity of 1,331 MW and 7 Solar SPVs with a generation capacity of 422 MW (487 MWp DC), operating primarily in the southern, western and central parts of India. The assets have a proven operational track record and long-term PPA with an average remaining life of ~18 years.

This is the largest acquisition made by JSW Energy since inception, and will leapfrog the current operational generation capacity by over 35% - from 4,784 MW to 6,537 MW. Moreover, with about 2,500 MW of under-construction wind and hydro projects which are likely to be commissioned in phases over the next 18-24 months, JSW Energy platform capacity gets enhanced to ~ 9.1 GW – where the share of renewables increases to ~ 65%. Further, this is likely to help the company in achieving its renewable-led capacity growth target of 10 GW by FY25, well ahead of timelines.

KPMG India Services LLP were the transaction advisor to the company, while Khaitan & Co. were the legal advisors and PricewaterhouseCoopers Services LLP carried out financial and tax due diligence.

Prashant Jain, Joint Managing Director and CEO of JSW Energy, said:, 

“We are excited to acquire Mytrah’s 1.75 GW of renewable energy portfolio which is value accretive to our shareholders on day one. This landmark deal demonstrates our strong commitment to achieve our vision of achieving 10 GW capacity by 2025 and being a leading player in India’s Energy Transition. This acquisition further strengthens and diversifies our operating footprint across various key resource rich states. We also believe that by leveraging our strong industry, operating and financing expertise, we would be able to significantly improve the operating performance of this entire portfolio, which will ultimately create tremendous value to our shareholders. JSW Energy will continue to look for more such opportunities for value accretive acquisition to aid its already ambitious growth plans for this sector. This provides a fillip to the Company’s growth aspirations and aligns with our renewable-led growth philosophy. Aside from generation, we also continue to pursue our organic pursuit of storage as well as green hydrogen and its derivatives play. ”

Pritesh Vinay, Director (Finance) and CFO of JSW Energy, said:, 

“The acquisition of Mytrah’s portfolio by JSW Energy is significantly value accretive and consistent with our long track record of being prudent in capital allocation and focusing on high cash returns. This is a very attractive acquisition – both from ‘Build vs Buy’ trade off as well as relative value when compared to all acquisitions in this space in recent times. We have a multi-pronged asset optimisation, performance improvement and capital structure optimisation plan over the next 12-24 months –which will drive significant value creation over the life of the assets. Moreover, the balance sheet headroom even after consummating this large acquisition will give us the leeway to continue to pursue our growth ambitions. ”

JSW Energy has set an ambitious target for a 50% reduction in its carbon footprint by 2030 and achieving Carbon Neutrality by 2050 by transitioning towards renewable energy. The Company has set a target to reach 20 GW capacity by 2030, with the share of renewable energy increasing to 85%. Around 2.2 GW of renewable energy projects are currently under-construction, Wind projects of 1.26 GW tied with SECI, are expected to be fully commissioned in the next 12-18 months. Further, the company has received LoA for 300 MW project from SECI under its tranche XII auctions. With the acquisition of Mytrah Energy’s 1.75 GW, total platform capacity will increase to 9.1 GW.

JSW Neo Energy limited, a wholly owned subsidiary of JSW Energy Limited, is a vehicle formed as a part of re-organisation of business to own all the renewable/green and new energy businesses. The company is evaluating opportunities to foray into emerging energy businesses of hydro pumped storage, battery energy storage, green hydrogen, and becoming an energy products & services company.