Tata Power Renewable Energy Ltd (TPREL) has signed an agreement to acquire Welspun Renewables Energy Ltd (WREL) for Rs. 9,249 crore, reported the Mint. Touted as "the largest ever transaction in the renewable energy space in India," the acquisition will help Tata Power to up its clean energy production to 2300 megawatts (MW).
Part of $3 billion Welspun Group, WREL currently owns 1140 MW of renewable energy both in solar (900 MW) and wind (150 MW) utilities. The company put its assets on sale earlier this year, and sought an enterprise valuation for Rs. 9,500 crore to Rs. 10,000 crore. Spread across ten states, WREL's 1000MW of capacity is already operational, while the rest of it is in its advanced stage, as reported by Press Trust of India.
Tata Power Renewable Energy, a 100 percent subsidiary of Tata Power, has 294 MW of operational renewable power capacity at present, and another 400MW projects in solar and wind space under implementation phase. Tata Power is expected to transfer another 500MW renewable asset into Tata Power Renewable Energy.
Since most of Welspun's assets are revenue generating or operational assets, it would deliver significant value for all stakeholders of Tata Power CEO and MD Anil Sardana said. Tata Power is a $3 billion entity under the Tata Group. The company is expected to enhance the values of these acquired assets from its operational experience and financial streamlining.
Tata Power targets to achieve 18,000 MW of energy by 2022 from both its renewable and non-renewable energy businesses. Its overall energy production currently is 9,000 MW. The recent acquisition will facilitate the company's desired objective of having 30 to 40 percent of its total generating capacity from non-fossil fuel, Sardana said.
By 2022, India targets to install 1,00,000 MW (100 gigawatts) of solar power capacity and 60,000 MW of wind power capacity.