Mahindra and Mahindra will take over a solar projects developer within the group for ₹288 crore – EQ
In Short : The statement suggests that Mahindra and Mahindra, a part of the Mahindra Group, will acquire a solar projects developer within the group for ₹288 crore. This acquisition reflects the company’s strategic move to expand its presence and capabilities in the solar energy sector. Acquiring a solar projects developer aligns with the broader trend of businesses investing in renewable energy to support sustainability goals and diversify their energy portfolios.
In Detail : Mahindra and Mahindra’s board of directors approved the acquisition of 58.64 lakh equity shares of Emergent Solren, an arm of Mahindra Holdings Ltd, for ₹288 crore.
Following the completion of the transaction, the stake of Mahindra Holdings Ltd (MHL) in Emergent Solren Pvt Ltd (ESPL), a solar projects developer, would become nil, while M&M would hold 60.01% of the stake in ESPL.
It is a related party transaction, the Anand Mahindra-led company informed the stock exchanges. Anand Mahindra, the non-executive chairman of M&M, is an Indian billionaire with a net worth of over $2.6 billion as of December 13, according to Forbes.
Mahindra and Mahindra shares are up over 30% in 2023 so far.
Emergent Solren is engaged in the business of developing and operating renewable solar projects with a capacity of 360 megawatts.
Post the acquisition of Emergent Solren by Mahindra and Mahindra, it will sell the same to Sustainable Energy Infra Trust (SEIT), a joint venture between the Mumbai-based $19 billion conglomerate and the Ontario Teachers’ Pension Plan (a pension fund based out of Canada).
In September 2022, Mahindra and Mahindra said that Mahindra Holding will hive off some assets to a new company, which would then be sold to an infrastructure investment trust (InvIT) to be set up by a Canadian pension fund and its affiliates. The latest takeover of Emergent Solren is part of the same arrangement.
InvITs function like mutual funds that collect money and invest in specific projects. Investors in InvIT can buy and sell units. It is a fractional ownership that, experts say, are less volatile than stocks and give better returns than fixed deposits.
At 9.47 AM, shares of Mahindra and Mahindra were trading 1.28% higher at ₹1,655 apiece on the BSE.
