Canadian investment firm Alberta Investment Management Corporation (Aimco) is expressing interest in acquiring a significant minority stake in the Aditya Birla Group's renewable energy business. This conglomerate aims to sell up to 49% of its stake in Aditya Birla Renewables Ltd (ABREL) to raise approximately $400 million for expanding its renewable capacity. Currently, ABREL has an operational portfolio of 1 GW and plans to reach 2 GW by 2024. The company's projects are situated in various Indian states and have captive power procurers like Grasim, UltraTech Cement, Hindalco Industries, and Century Enka.
Aditya Birla Renewables Ltd is a joint venture between the Birla Group and Abraaj, with Birla holding a 51% stake and Gulf-based Abraaj holding the remaining 49% stake.
The Aditya Birla Group is now in discussions with overseas investors to bring in a stakeholder for the solar platform, according to sources familiar with the matter.
The conglomerate is looking to grow its business and is actively seeking a new investor with substantial financial backing. They are particularly interested in attracting large pension funds or sovereign wealth funds as investors. They are also exploring potential investors from the Gulf region.
As per one of the sources, the new investor might acquire a portion or the entirety of Abraaj's current stake in the company. Abraaj Group has faced challenges this year as several of its investors raised concerns about the misuse of funds and commissioned an investigation. These ongoing troubles with Abraaj have raised concerns about its ability to focus on this business, and hence, a new investor brought on board by the Birla Group might be asked to buy out a portion or the entirety of Abraaj's stake.
It's important to note that both the Aditya Birla Group and Abraaj have not provided official comments regarding these speculations.
Investors worldwide are showing interest in India's renewable energy sector, partly due to the Indian government's ambitious target to generate 175 gigawatts (GW) of renewable energy power by 2022. This has motivated significant investments in the sector, including Canada Pension Plan Investment Board (CPPIB) investing $247 million in ReNew Power Ltd earlier this year, and sovereign wealth funds GIC Holdings Pte Ltd and Abu Dhabi Investment Authority investing $450 million in Greenko Energy Holdings.
This move represents a significant opportunity for Alberta Investment Management Corporation (Aimco) to participate in India's growing renewable energy market. However, the details and terms of the investment are still being worked out.
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