Policy
The Reserve Bank of India (RBI) has held its key repo rate steady after six consecutive hikes, citing it was closely monitoring the impact of recent global financial turbulence. It may contemplate additional rate increases if necessary. The monetary policy committee (MPC) has maintained the main lending rate at 6.50 per cent. The benchmark 10-year 7.26 per cent 2032 bond yield fell to 7.146 per cent, the lowest level since mid-September, immediately following the announcement of the policy, from 7.2857 per cent prior to the decision.
RBI has established a framework for financial institutions to provide customers with green deposits. The framework intends to promote the development of the country’s green finance ecosystem, and applies to all regulated institutions, including scheduled commercial banks and deposit-taking non-banking financial companies. The framework will take effect on June 1, 2023 and revenues from green deposits will be allocated in accordance with the official Indian green taxonomy, which is still under finalisation. As an interim solution, banks will be compelled to use earnings from green deposits to fund renewable energy projects such as solar, wind, biomass and hydropower projects that combine energy generation and storage.
Sanctions/Grants
The Maharashtra government has allocated funds for various projects under the state budget 2023-24. Funds worth Rs 7.34 billion will be provided for the land acquisition process of the Aurangabad airport expansion project and Rs 10 billion will be provided for the Nagpur international airport project. Meanwhile, the government has sanctioned Rs 5.27 billion for the Shirdi airport new terminal building project.
The Ministry of Railways (MoR) has sanctioned funds worth Rs 3 billion for redevelopment of the Thrissur railway station project. The project involves integrated redevelopment of the Thrissur railway station in Kerala. It is expected to be completed by 2025.
The Mumbai Metropolitan Region Development Authority (MMRDA) has allocated funds for various road projects in Maharashtra under the state budget 2023-24. These include the Versova-Virar Sea Link Project (Rs 200 million), Orange Gate-Marine Drive Underground Road Tunnel Project (Rs 15 billion), Borivali-Thane Tunnel Project (Rs 30 billion), Teen Hath Naka Junction Improvement Project (Eastern Express Highway) (Rs 1 billion), Bhiwandi-Wada Road Project State Highway (SH-35) (Rs 250 million), Kalyan Bypass Road Project (Phase-III) (Rs 1.5 billion) and Deharji Madhyam Project (Rs 4.48 billion).
Loans
Vena Energy has reached financial closure of the Gudadur Hybrid Project, a 176 MW solar-wind hybrid renewable energy project in Karnataka. The project consists of 48 MW of solar capacity and 128 MW of wind capacity, and is expected to be commissioned by the fourth quarter of 2023.
Reliance Industries Limited (RIL) and its unit Reliance Jio Infocomm have raised $2 billion add-on foreign currency loan at the most competitive rates. The move comes days after signing a $3 billion financing agreement in India’s most widely syndicated loan. The fundraising is the largest through syndicated term loans by an Indian corporate house in at least five years. The new loan of $2 billion has the same terms as the borrowing signed on the previous loan with 55 lenders, including 40 that joined in two phases of syndication.
The Adani Group has completed full prepayment of margin-linked share-backed financing worth $2.15 billion as part of its debt prepayment plan, before its deadline of March 31, 2023. The company also prepaid a $500 million facility it had taken for Ambuja acquisition financing. This is in line with promoters’ commitment to increase equity contribution and promoters have now infused $2.6 billion of the total acquisition value of $6.6 billion for Ambuja and ACC.
JSW Energy Limited is looking to refinance Rs 60 billion of renewable energy loans that it assumed when it acquired assets from Mytrah Energy (India) Private Limited for an enterprise value of Rs 119.34 billion in August 2022. Notably, JSW Energy had acquired 18 special purpose vehicles (SPVs) of Mytrah Energy through its arm, JSW Neo Energy Limited. The total debt of the SPVs was around Rs 90 billion. JSW Energy is looking to refinance two-thirds of that, the portion of the debt that it considers costly.
SJVN Limited has secured Rs 9.15 billion green finance from Japan Bank for International Cooperation (JBIC) to fund its 90 MW Omkareshwar floating solar power project in Madhya Pradesh and the 100 MW Raghanesda solar power project in Gujarat. The loan is co-financed by Japanese private financial institutions. SJVN and JBIC virtually inked the facility agreement under the Global Action for Reconciling Economic Growth and Environmental Preservation (GREEN) Programme of JBIC.
The World Bank has approved a $363 million loan to Karnataka to provide clean drinking water supply to two million rural households in the state through piped water connections. The Karnataka Sustainable Rural Water Supply Programme will support the state government’s ambition to provide tap water connections to every rural household in the state.
Bonds/Securities
The International Finance Corporation (IFC) announced a $50 million investment in a sustainability-linked bond (SLB) issued by Tata Cleantech Capital (TCCL). The funding will assist in diversifying the company’s borrowing profile in the fight against climate change.
Tata Power Delhi Distribution Limited (TPDDL) has inked a deal with the Asian Development Bank (ADB) to raise Rs 1.5 billion through non-convertible debentures (NCDs) to improve Delhi’s power distribution through grid modifications. Aside from NCDs, ADB will arrange a $2 million grant for TPDDL to fund the procurement and integration of a pilot battery energy storage system (BESS) with the TPDDL network.
InvITs/REITs
Mindspace Business Parks’ real estate investment trust (REIT) has raised Rs 5.5 billion ($66.7 million) through a debut green bond issue. The company offered green bonds maturing in three years and one month marking the first such offering by any REIT in India. Mindspace Business Parks’ REIT will pay a coupon of 8.02 per cent on a quarterly basis. Star Health and Allied Insurance Co was an anchor investor to the issue and subscribed 30 per cent or Rs 1.65 billion of the total amount. The proceeds from the issue will be used to provide loans to the special purpose vehicles of the REIT for refinancing existing loans as well as for construction and development of relevant green projects.
The National Investment and Infrastructure Fund Limited (NIIF) is set to launch its first infrastructure investment trust (InvIT) for road assets. It intends to raise growth capital of $500 million (Rs 40 billion) from international and domestic investors. The current portfolio value of the seven road assets stands at approximately $2 billion.
A group of investors led by Kairus Shavak Dadachanji has invested Rs 1.77 billion ($21.4 million) in Shrem Infrastructure Investment Trust (InvIT). Through open market transactions, Dadachanji and other investors acquired 15.6 million shares of the InvIT from Shrem Infra Structure Private Limited for Rs 114 per share. Of this, Dadachanji alone bought 9 million units for about Rs 1.02 billion. Post the latest investment, Dadachanji owns 5 per cent of the units of the InvIT.
Reliance Industries Limited (RIL) has initiated a process that could lead to the Group unlocking value in its retail business’ backend warehousing and associated logistics assets via an infrastructure investment trust (InvIT). It has already started laying the groundwork for the proposed InvIT, having registered a trust, Intelligent Supply Chain Infrastructure Trust, with the Securities and Exchange Board of India (SEBI). Reliance has established Intelligent Supply Chain Infrastructure Private Limited, which is anticipated to manage the assets that will be housed under the InvIT.
IPO/QIP
JSW Infrastructure has postponed its Rs 40 billion initial public offering (IPO) due to turbulent market conditions. The company is yet to file draft red herring prospectus (DRHP) with SEBI. The IPO is likely to be deferred by about nine months.
India’s largest power producer NTPC Limited is likely to divest 25 per cent of its green energy arm through an initial public offering (IPO) in 2023, after shelving a plan to sell the stake to Malaysia’s Petronas. Petronas offered $460 million for a 20 per cent stake in NTPC Green Energy, outbidding Indian companies with an offer of Rs 27.52 per share ($0.3362).
Equity Moves
Welspun One Logistics Parks (WOLP) has announced the launch of its second fund of Rs 20 billion, including a greenshoe option of Rs 10 billion. WOLP Fund 2 is the successor of WOLP Fund 1, a SEBI-regulated alternative investment fund (AIF) for domestic investors launched in 2021. WOLP Fund 1 had successfully raised capital commitments worth Rs 5 billion from a set of high net worth investors including marquee individuals and family offices.
Fourth Partner Energy (FPE), a Hyderabad-based solar energy company, is likely to secure new capital to expand its portfolio of power-generating assets. The renewable energy company will receive $74 million in debt financing from the Dutch development bank FMO to finance the construction of a 602 MW portfolio of distributed generation assets. These assets include approximately 419 MW of on-site solar plants and 183 MW of ground-mounted solar and wind-solar hybrid power plants located off site. The proposed debt facility will take the form of a rupee-denominated senior loan and will be for a period of up to 16 years.
Mergers and Acquisitions
GAIL has received approval for its resolution plan from the Ahmedabad Bench of the National Company Law Tribunal (NCLT) for the acquisition of JBF Petrochemicals Limited for Rs 20.79 billion. A consortium of Indian Oil Corporation Limited and Oil and Natural Gas Corporation had also submitted bids for the insolvency process run by IDBI Bank to recover Rs 56.28 billion worth of dues from financial and operational creditors. JBF Petrochemicals was incorporated in 2008 to set up a 1.25 million tonne per annum (mtpa) purified terephthalic acid plant at Mangalore Special Economic Zone. IDBI and other banks had lent money to JBF for the same.
State-run NLC India Limited plans to invest Rs 10 billion ($125 million) for a 51 per cent stake in a green energy joint venture (JV) it is setting up with Assam Power Distribution Company Limited (APDCL). The proposal for the investment has already been sent for the union government’s approval. The JV plans to set up a 1 GW solar power capacity in Assam at an investment of around Rs 55 billion. The proposed solar power capacity is expected to cost Rs 55 million per MW and will be set up in a phased manner with 200 MW to be added annually.
The board of IOCL has accorded approval for formation of a wholly-owned subsidiary in India, to operate in the domain of low carbon, new, clean and green energy businesses. The proposed wholly-owned subsidiary will focus and pursue IOCL’s low carbon and green energy business to meet the operational requirements of the net-zero target and beyond. The formation of subsidiary is subject to approval of NITI Aayog and the Department of Investment and Public Asset Management (DIPAM).
Caisse de dépôt et Placement du Québec (CDPQ), the Canadian pension fund, is in talks with the American Tower Corporation (ATC) to buy a 50 per cent stake in its Indian unit, ATC Telecom Infrastructure Private Limited, as it has sought to reduce its exposure in the country in response to mounting business concerns. Previously, KKR had submitted non-binding bids. The India arm is estimated to be worth between $1.5 billion and $2 billion. Depending on the final evaluation, the 50 per cent stake would be worth between $750 million and $1 billion.
In a transaction that facilitated the investor’s exit, DB Power Limited has repurchased Global Infrastructure Partners’ (GIP) stake in its thermal power business for Rs 4 billion. The buyback was funded through the company’s internal accruals. The deal comes shortly after Adani Power cancelled its agreement to buy DB Power.
Adani Power Limited has completed the sale of its 100 per cent equity stake in wholly-owned subsidiary, Support Properties Private Limited (SPPL), to AdaniConnex Private Limited (ACX) for an enterprise value of Rs 15.57 billion. The ACX is a 50:50 joint venture between Adani Enterprises Limited, which is a promoter group company, and EdgeConneX. It is engaged in the business of developing world-class data centres and providing co-location hosting and ancillary services. Notably, SPPL is yet to commence commercial activities.
The Competition Commission of India (CCI) has approved the acquisition of JM Baxi Ports and Logistics Limited by HL Terminal Holding B.V. HL Terminal Holding B.V. is a newly incorporated entity, intended to serve as a strategic/investment holding company for the port terminal business of Hapag Lloyd Aktiengesellschaft (HLAG).
Asset Sales
REC Power Development and Consultancy Limited (RECPDCL) has handed over six project-specific special purpose vehicles (SPV) through the tariff-based competitive bidding (TBCB) process to Power Grid Corporation of India Limited (Powergrid). The six SPVs are Khavda RE Transmission Limited, KPS2 Transmission Limited, KPS3 Transmission Limited, Khavda II-B Transmission Limited, Khavda II-C Transmission Limited and ERWR Transmission Limited. The first five SPVs will implement transmission system projects in Gujarat. The ERWR Transmission Limited SPV will establish the inter-regional link between the eastern region grid and the western region grid through a 400 kV D/C transmission line between Jeypore (Odisha) and Jagdalpur (Chhattisgarh).
REC Power Development and Consultancy Limited (RECPDCL) has handed over the special purpose vehicle (SPV) Khavda II-A Transmission Limited to Adani Transmission Limited (ATL). ATL has been selected as the successful bidder of the interstate transmission project through TBCB. The SPV, targeted to be implemented in 24 months, involves the implementation of a 765-kV double circuit line from the Khavda Pooling Station-2 to Lakadia.
PFC Consulting Limited (PFCCL) has transferred three project-specific SPVs to Powergrid. The three SPVs are Bhadla Sikar Transmission Limited, Dharamjaigarh Transmission Limited and Raipur Pool Dhamtari Transmission Limited. Powergrid has been selected as the successful bidder of the interstate transmission project through TBCB.
JSW Neo Energy Limited (JSW Neo), a wholly-owned subsidiary of JSW Energy Limited, has completed the acquisition of 1,753 MW of renewable energy assets from Mytrah Energy (India) Private Limited (MEIPL), in a two-step process. Acquisition includes 15 SPVs and 13 ancillary SPVs having a total installed renewable energy capacity of 1,449 MW. The 28 subsidiaries of MEIPL have now become subsidiaries of JSW Neo and accordingly step-down subsidiaries of JSW Energy. The transaction values the Mytrah Energy portfolio at approximately Rs 101.5 billion.
Hindustan Construction Company Limited (HCC) has completed sale of the entire equity stake in Baharampore-Farakka Highways Limited (BFHL), the SPV incorporated for implementation of the Baharampore-Farakka Four Laning Highway Project (NH-34), to Cube Highways and Infrastructure Private Limited for an enterprise value of Rs 13,230 million.
KKR has signed an agreement to acquire a toll road from the Hyderabad-based Navayuga Group. The private equity firm is buying the Navayuga Udupi Tollway for Rs 9.24 billion ($113.2 million). The toll road has a concession period of 25 years starting 2010.
Adani Ports and Special Economic Zone (APSEZ) Limited has completed the acquisition of Karaikal Port. The acquisition cost is Rs 14.85 billion. Besides, APSEZ will spend Rs 8.5 billion in upgrading the port infrastructure. Karaikal Port, commissioned in April 2009 and developed on an area of 600 hectares, is located near the town of Karaikal in the Union Territory of Puducherry.
