Birla enters renewables top tier with $1.8 bn Sprng deal
Mumbai: Billionaire Kumar Mangalam Birla has made his biggest bet yet on India’s clean energy sector, acquiring Sprng Energy from Shell at an enterprise value
Mumbai: Billionaire Kumar Mangalam Birla has made his biggest bet yet on India’s clean energy sector, acquiring Sprng Energy from Shell at an enterprise value of $1.8 billion. The deal will more than double the renewable power capacity of the Aditya Birla Group’s clean energy business, vaulting it into the country’s top tier of renewable energy companies and setting the stage for a faster expansion. Sprng has 3.3 gigawatts (GW) of operational capacity while another 1.7GW is under construction. Post acquisition, Aditya Birla Renewables Ltd's (ABRL) capacity will rise to about 9.3GW, a statement from the Aditya Birla Group said. Also Read | Aditya Birla Fashion doubles down on TMRW, chases scale over profits The acquisition will catapult ABRL into the country’s fifth-largest renewable company, with 9.3 GW of capacity, behind Adani Green Energy, ReNew Power, Tata Power and NTPC Green Energy. The Aditya Birla company now has its sights on raising its capacity to 20GW, comparable to the country’s largest renewable player Adani Green Energy.
To be sure, Adani is also rapidly expanding its clean power assets, locking the two billionaires in an expansion race on yet another front after cement, copper and aluminium. Adani Green has an installed capacity of 19.3GW, as per Blackridge Research and Consulting, a Hyderabad-based consulting firm. ReNew Power has 12.6GW; Sterling and Wilson Renewable Energy 12. GW; Tata Power Renewable 11.6GW and NTPC Green Energy 10.07GW. “Over a long arc of time, the Aditya Birla Group has built businesses at global scale that have contributed to India's long-term growth, be it in building materials, metals, financial services, or retail,” said Kumar Mangalam Birla, the chairperson of the Aditya Birla Group. “We view India’s energy transition through the same lens. At its core, this is about strengthening our nation’s energy future, enhancing industrial competitiveness, and creating the foundations for sustained economic growth,” he said. Also Read | Aditya Birla Health bets on wellness incentives to improve claims ratios The acquisition helps ABRL diversify from the commercial and industrial (C&I) customers into the utility market, which includes power supply to state power utilities.
“By integrating Sprng Energy’s high-quality utilities portfolio with our C&I capabilities, we are significantly enhancing both the strength and resilience of our combined platform. Additionally, Sprng Energy brings a high-quality asset base, creditworthy off-takers and strong contracted cashflows,” said Aryaman Vikram Birla, director at Aditya Birla Group and Aditya Birla Renewables, and the son of Kumar Mangalam. “Having almost achieved our ~10 GWp target ahead of time, we are now on track to double capacity in the next few years,” he said. Deal details This is the second time that Sprng Energy is changing hands. Shell had purchased the independent power producer from Actis for $1.55 billion in 2022, when its operational portfolio was about 2.1GW with another 0.8GW under development. The asset was purchased by ABRL at a steep discount, according to Harshraj Aggarwal, executive vice president-institutional equity research at Yes Securities. “By partnering with BlackRock (GIP) for smart funding, Birla secured these assets at a steep public market valuation discount while fully protecting its corporate balance sheet from heavy debt,” he said.
The BriefWire