Adani Pays $3.50 Billion in SB Energy Holdings

In the biggest inorganic renewable energy deal in the Indian markets, Adani Green Energy bought SB Energy Holdings for a consideration of $3.50 billion or Rs.26,000 crore. It was an all-cash deal and marks the biggest inorganic investment of Adani Green in the renewable energy space. Adani Green is among the most valuable companies of the Adani Group.

SB Energy Holdings was formerly held jointly by Softbank of Japan and the Delhi based Bharti group in the ratio of 80:20. Post the acquisition, SB Energy Holdings becomes a 100% subsidiary of Adani Green Energy. This investment will be part of the massive $20 billion renewable energy investment committed by the Adani Group over the next 10 years.

The Modi government had made the shift to renewable energy and enhancement of the green energy mix a matter of policy commitment. This move by Adani will be one more step towards that larger commitment to renewable energy. Adani Energy is already among the largest companies in the world in terms of installed renewable energy capacity.

SB Energy today marks one of the few high quality renewable energy portfolios available in India. SB Energy has renewable assets with 5 GW of renewable capacity. This includes 1.70 GW of operational renewable assets, 2.56 GW of renewable capacity under construction and 700 MW of assets near construction. These capacities are spread across 15 projects.

Out of the total 5 GW renewable portfolio of SB Energy Holdings, nearly 4.18 GW or 84% of the total capacity is solar energy. Wind accounts for 7% of the total renewable capacity and the balance 9% is a hybrid of wind, solar and hydro power capacity. The average project size of each of the 15 projects is around 330 MW.

In terms of strategic fit, this acquisition will boost Adani Green Energy’s operational portfolio to 5.4 GW and its overall growth to 19.8 GW. Due to the acquisition, AGEL has already locked in an expansion of 4X operational capacity over the next few years. Nearly 88% of the proposed 19.8 GW capacity will have sovereign counterparties, which largely de-risks the business model.