Mahindra ropes in Canada Pension Plan to capitalise on the renewable energy space in India

The strategic partnership is aimed to capitalize on the growing renewables opportunity in India and contribute to the country's decarbonization ambitions.

Mahindra Group and Ontario Teachers’ Pension Plan Board ('Ontario Teachers’) signs a binding agreement for the latter to acquire a 30% stake in Mahindra Susten Private Limited. Ontario Teachers' Pension Plan Board, through its WOS, has entered into a Share Purchase Agreement with Mahindra Holdings Ltd( MHL) to acquire a 30% equity stake in Mahindra Susten Pvt Ltd, WOS of the company for a cash consideration of Rs 711 crore at an equity valuation of Rs 2,371 crore.

The proposed transaction also envisages the setting up of an Infrastructure Investment Trust (InvIT) in compliance with applicable regulations of the Securities and Exchange Board of India. The InvIT is initially proposed to comprise renewable power assets seeded by Mahindra Susten with an operational capacity of around 1.54 GWp. As part of the proposed transaction, shareholder loans of Rs 575 crore advanced by Mahindra Group to Mahindra Susten will be repaid.

With the 30% equity stake sale to Ontario Teachers’ repayment of shareholder loan by Mahindra Susten, Mahindra Group would receive an inflow of around Rs 1,300 crore.

Apart from the above, it also provides for the sale of an additional 9.99% of the Paid-Up Equity Share Capital of MSPL by MHL to Ontario Teachers’ or any of its affiliates by May 2023.

Over the same period, Ontario Teachers’ has committed to deploy an additional amount of up to Rs 3,550 crore into the business and the InvIT over the next seven years. This transaction will enable Mahindra Susten to build a strong renewable energy business focused on solar energy, hybrid energy, integrated energy storage & round-the-clock ("RTC") green energy plants.

At 14.30 pm, shares of Mahindra & Mahindra were quoting at Rs 1283.05 with a gain of 2.6% or Rs 32.55 over its previous close.