Softbank to Exit the Indian RE Sector Amid Global Crisis

Softbank, the Japanese Telecom giant, made it big with its investment in Alibaba, the Chinese e-commerce group. The bank started its story in India with investments in Indian e-commerce businesses like Snapdeal, Housing.com, and Ola.  Later, Softbank became the majority stakeholder in SBG Cleantech a JV along with India’s Bharti Enterprises and Taiwan’s Foxconn. It also tried to score brownie points with the Indian government’s “Make in India” as it tried entering into solar panel manufacturing.

Softbank was going big in the Indian Renewable energy sector and had announced a $100 billion investment into India’s solar industry over the next 10-15 years.  The company had already built a substantial portfolio of solar power projects in India’s rapidly growing solar energy sector, at that point in time. Softbank became popular for its audacious plans and its ever more audacious investments. However, the company is now planning an exit from the Indian energy market as it is mired in the global crisis and looks at raising cash amid global investment setback.

Softbank is already in talks with sovereign wealth and pension funds from the Far East and Gulf regions and a few Silicon Valley technology giants. However, still at an early stage and may not result in a deal. The company is open to an outright sale of its 70% stake in SBG Cleantech and also a majority stake sale. It is looking for a partner who can offer equity commitments of $1.5 billion-$2 billion to execute and complete a pipeline of 7 GW of renewable projects worldwide.

The Indian solar power sector is already facing a slowdown with lower capacity addition in the past two years – from 9.4 GW in 2017-18 to 6.5 GW in 2018-19 and just 2.9 GW in the first half of 2019-20. We hope that this development from Softbank is not bad news for the energy sector in India.