Grasim Industries' Renewable Energy Division Engages in Advanced Discussions with Nebras Power from Qatar for Investment

19 Dec, 2023

Grasim Industries' Renewable Energy Division Engages in Advanced Discussions with Nebras Power from Qatar for Investment

The Kumar Mangalam Birla-led Aditya Birla Group is in advanced negotiations with Nebras Power, a Middle Eastern firm, aiming to bring in a strategic investor for its renewable energy venture under Grasim, sources familiar with the matter revealed to Moneycontrol.

"Nebras Power and Aditya Birla Renewables have engaged in an exclusivity pact, intending to establish a 51:49 joint venture with an investment of approximately $400 million," disclosed one source close to the development.

Confirming the talks, a second source stated, "Aditya Birla Renewables has set a target of achieving a 4.5 GW installed capacity by FY 26 and is seeking growth capital. Nebras is presently conducting thorough due diligence."

Additionally, a third source mentioned that Standard Chartered is acting as the sell-side advisor for this deal.

However, the possibility of the discussions materializing into an eventual transaction remains uncertain, as highlighted by another source, who also mentioned the interest expressed by Japanese and Canadian entities in earlier stages.

A fourth source reiterated Nebras Power's interest in the proposed collaboration.

All sources preferred anonymity.

At present, both the Aditya Birla Group and Nebras Power have not responded to email queries sent by Moneycontrol. Updates will be provided as soon as there is any communication from these organizations. Standard Chartered declined to comment.

If the deal materializes, it could mark Nebras Power's inaugural investment in India's renewable energy sector.

Background:

Grasim's subsidiary, Aditya Birla Renewables, established in 2011, offers various renewable energy solutions and serves clients across India, boasting 6 government utilities and 50 renewable projects spanning 9 states. Notably, the firm recorded a Q2FY24 revenue of Rs 86 crore, reflecting a 55% YoY increase, while quarterly EBITDA grew by 49% YoY to Rs 56 crore.

Kumar Mangalam Birla, Chairman of Aditya Birla Renewables, outlined plans to triple the power generation capacity by the end of the current financial year. The cumulative installed capacity stood at 744 megawatts in FY 2023, anticipated to surge to 2 gigawatts by March 2024.

In a prior attempt in October 2015, the Birla Group had announced a collaboration with the Abraaj Group to develop a renewable energy platform in India, which ultimately did not progress due to the collapse of the Dubai-based private equity firm amidst investor concerns regarding its healthcare fund.