Reliance, one of the country’s largest companies, has acquired controlling stake in a renewable energy firm.
In a Bombay Stock Exchange (BSE) filing, Reliance Industrial Investments and Holdings Limited (RIIHL), a wholly-owned subsidiary of Reliance Industries Limited, announced that it has entered into a binding agreement with Kanoda Energy Systems Private Limited (KESL) for the acquisition of equity shares for a cash consideration not exceeding ₹750 million (~$10.8 million).
The said investment will translate into 88 percent equity stake in KESL on a fully diluted basis. The total investment is likely to be completed by March 2020.
According to RIIHL’s BSE filing, “KESL has presence in specialized fields of solar advisory, product design and technology validation and recently forayed into engineering, procurement & construction (EPC) and operation & maintenance (O&M) of solar photovoltaic (PV) systems. KESL had turnover of ₹105.4 million (~$1.51 million), ₹16.3 million (~$0.2 million) and 0; and net profit (loss) of ₹8.138 million (~$0.12 million), ₹1.654 million (~$0.02 million) and ₹510,000 (~$7,340.20) in financial year (FY) 2018, FY 2017 and FY 2016 respectively.”
The aforesaid investment will assist in the group’s initiatives to deploy more renewable energy sources.
Recently, Caisse de dépôt et placement du Québec (CDPQ), a long-term institutional investor, increased its stake in Azure Power Global Ltd (Azure Power). CDPQ’s stake has now increased to 40 percent through ₹7.32 billion ($0.11 billion) contribution to the company’s recent capital raising. With this new investment, CDPQ’s total investment now stands at ₹17.6 billion ($0.26 billion)).
In October 2017, the Indian Renewable Energy Development Agency (IREDA) had announced it would provide loan to the tune of ₹3 billion (~$45.7 million) to Reliance Money, a brand by Reliance Commercial Finance Limited, a subsidiary of Reliance Capital Limited, for renewable energy and energy efficiency projects.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.