Small Solar Developers getting acquired in India as Sector starts Maturing

The Indian Solar Power Industry is starting to see some Solar M&A activity pick up as the sector starts maturing. The Indian Solar Energy Industry starting picking up pace in 2009 with the advent of the first phase of the solar federal subsidy which envisaged putting up 20 GW by 2022 (a figure which I think is too low btw) . A large number of companies entered the fray many of which were small . These companies hoped to profit from selling the licenses rather than being serious players. Many of these companies could not do so as the reverse auction process was quite competitive. A large number of companies also got started to take advantage of individual state subsidies from governments in Gujarat.

Now bigger companies and funds are taking out these small companies which have unfinished projects. Shree Ganesh Jewellery has bought over 2 small solar firms while another smaller developer got bought over by a fund. Lanco Infratech which is one of the biggest private power utilities in India is also looking to sell its power arm given the major financial difficulties being faced by the power industry in India over coal. The company has one of the biggest solar development pipelines and that too will get sold.

City-based Shree Ganesh Jewelery House Ltd (SGJHL) has ventured into solar power generation business by acquiring 55% controlling shares in two solar PV (photovoltaic) companies named Alex Astral Power Ltd and Alex Spectrum Radiation Ltd.These two PV solar firms are co-promoted by Kolkata-based Sureka Group. The Director (Finance) at SGJHL, Sharad Mohata said that Alex Astral Power Ltd had already commissioned a 25 megawatt solar power plant in Gujarat and Alex Spectrum was likely to commission a 5 megawatt solar project in Rajasthan shortly.

Lanco Infratech is known to be in talks with international energy majors like AES of United States and Gaz de France to sell a part of its power business. The company had recently said it planned to sell a minority stake in its power business and raise $600-$750 million (Rs 2,940- Rs 3,675 crore).

“We have gone on record about the fact that we retained Macquarie to help raise equity for Lanco’s power business. This involves talking to various investors interested in the Indian power sector over a considerable period of time, which may include the names mentioned,” Sharad Jhingan, chief operating officer, Lanco Infratech, said responding to an e-mail query. AES and Gaz de France did not respond to queries.