IL&FS (Infrastructure Leasing and Financial Services) is now having advanced talks with Orient Green Power, which is based out of Chennai for merging the wind energy assets. This complete stock-reverse merger of the unlisted IL&FS will be valuing the total combined entity at the rate of INR 4.5K-5K crore, stated 2 people with a good knowledge about this matter. With a capacity of generating close to 1400 MW, it will now create one of the nation’s biggest listed wind energy firms.
One of the reliable sources stated that the boards of the IL&FS as well as Orient are now expected to be meeting pretty soon to discuss the merger proposal; if it gets cleared, it will actually help the entity in acquiring more of wind energy assets. The main aim is to consolidate and also utilize the stock as well as cash for acquiring assets that will be helping in scaling up the capacity to around 2000 MW by the end of the 2018 financial year.
IL&FS, which is one of the nation’s major infrastructure financiers, is going to be the largest shareholder that will have more than half of the stake; this will then be followed by the very popular Shriram Ventures and also Orix Corporation from Japan. This merged entity will be having INR1200 crore operational profits on the revenue of INR 1,400 crore. This is actually valued at 7 times its operating profit and will be having a debt of INR 3.5K crore.
The IL&FS agency stated that as a matter of this policy, they do not actually comment on the media or the market speculations that are related to groups or affiliate firms. The company Orient Green Power did not actually respond to the questionnaire by ET until the press conference. There has actually been a surge in the clean energy deals because the firms raise the funds for expanding in the competitive and crowded sector.
In the month of March 2016, ILFS sold around 50 percent in the wind energy sector to the Orix group that is based out from Japan, which happens to be the investor in its parent since the year 1993. The Chief Executive Officer of Orix, Mr. Makoto Inoue stated that his firm was extremely pleased that the partnership with IL&FS will be diversifying the portfolio into India, which is really a fast growing country. He added that the bigger vision of the Government is for scaling up the investment in this sector and is actually attracting the long term partners just like Orix to be investing in India.
India has actually set an awesome target of installing close to 100 GW of the solar capacity and around 60 GW of the wind capacity by the end of the year 2022. With around INR 65K crores debt that is accrued for building the power plants and also roads, IL&FS has now been really putting efforts in selling off the non-core assets for bringing down its leverage ratio along with the capital infusion.