Tata Power Renewable Approves Sale of 83.6 Million Shares to BlackRock Mubadala JV

Listen to this article

A wholly-owned subsidiary of Tata Power, Tata Power Renewable Energy Limited (TPREL), has approved the allotment of 83.6 million equity shares with a face value of ₹10 (~$0.125) each at a price of ₹239.22 (~$2.99) per share, including a premium of ₹229.22 (~$2.87), to support TPREL’s growth plans financially.

The allotted shares aggregate to ₹20 billion (~$251 million) on a preferential basis to GreenForest New Energies Bidco Limited, a joint investment vehicle of BlackRock Real Assets and Mubadala Investment Company owned by the Abu Dhabi government.

Earlier this year, BlackRock and Mubadala entered a binding pact to invest in Tata Power Renewable Energy. While BlackRock and Mubadala were to invest ₹40 billion (~$525 million) in equity in two equal tranches for a 10.53% stake in TPREL, the final shareholding would range from 9.76% to 11.43% on final conversion.

The Competition Commission of India approved the stake acquisition in July.

The investment includes a diverse portfolio of assets with stable revenue sources, including a 25-year fixed-price power purchase agreement (PPA) for grid-connected large-scale projects.

The platform will consist of five distinct businesses providing long-term, customer-centric solutions while accommodating all clean energy businesses and operations of Tata Power. They include businesses in utility-scale solar, wind, and hydro generation assets; solar cell and module manufacturing; engineering, procurement, and construction (EPC) contracting; rooftop solar infrastructure; solar pumps and electric vehicle charging infrastructure.

With the approval of the latest allotment of shares, Tranche I of the transaction is completed. The infusion of another ₹20 billion (~$251 million) will be concluded after six months from the date of the agreement.

Tata Power has planned an expenditure of more than ₹750 billion (~$9.46 billion) until 2027 on renewables. It also aims to scale its operations towards becoming a net-zero company by 2045, water-neutral by the end of the decade, and zero waste-to-landfills before 2030.

Tata Power posted revenue of ₹147.53 billion (~$1.84 billion) for the first quarter (Q1) of the financial year 2023, a 48% year-over-year increase from ₹99.74 billion (~$1.24 million).