Focus on Renewable Energy Growth at Scale with India's Largest Renewable Energy InvIT

Focus on Renewable Energy Growth at Scale with India’s Largest Renewable Energy InvIT

Mahindra Group and Ontario Teachers’ Pension Plan Launch India’s Largest Renewable Energy InvIT

In a groundbreaking collaboration, Mahindra Group and the Ontario Teachers’ Pension Plan Board (Ontario Teachers’) have jointly sponsored an infrastructure investment trust (InvIT) dedicated to renewable energy assets. The InvIT, named ‘Sustainable Energy Infra Trust’ (SEIT), has made a significant mark as India’s most prominent investment trust in the renewable energy sector.

SEIT marked its debut on the National Stock Exchange on September 15, 2023, and has successfully raised primary capital of ₹1,365 crore ($165 million) as part of its initial unit offering. The substantial response from global and Indian investors, including the Asian Infrastructure Investment Bank (AIIB), underscores the confidence in SEIT’s potential.

Focus on Renewable Energy Growth at Scale

Aligned with Mahindra Group and Ontario Teachers’ commitment, SEIT is strategically positioned to foster the growth of India’s renewable energy sector at scale. Holding operational renewable power assets with a generation capacity of approximately 1.54 GWp, SEIT aims to contribute significantly to the nation’s green energy goals.

Mahindra Susten, a key player in renewable energy, has played a crucial role in seeding SEIT with operational assets. Through a right of first offer (ROFO) arrangement, Mahindra Susten will continue to offer renewable energy assets for sale to SEIT, ensuring a continuous pipeline for future growth. The capital infusion of ₹897.8 crore ($108 million) to Mahindra Susten positions the company for the next expansion phase.

Both Mahindra Group and Ontario Teachers have demonstrated their commitment by pledging investments of up to ₹3,050 crores ($368 million) and ₹3,550 crores ($428 million), respectively, into Mahindra Susten and SEIT. This significant financial backing reflects confidence in SEIT’s potential and India’s broader renewable energy landscape.

Listing as a Testament to Attracting Strong Investors

The successful listing of SEIT is a testament to Mahindra Group’s ability to attract solid external investors. Anish Shah, Group CEO & MD of Mahindra Group, highlighted Mahindra Susten’s ambitious plans for 5x growth in the next five years, aligning with both environmental goals and contributing to the nation’s green energy objectives.

The Indian government’s steadfast focus on renewable and sustainable energy makes the industry attractive for investments. Avinash Rao, CEO of the investment manager at SEIT, emphasized that this focus enables further growth of SEIT’s portfolio, positioning it as a critical player in the evolving renewable energy landscape.

Kotak Mahindra Capital, Axis Capital, and Avendus Capital Private Limited played pivotal roles as placement agents for the transaction. Legal counsels Cyril Amarchand Mangaldas (for SEIT and the sponsors) and S&R Associates (for the placement agents) contributed to the successful execution of the collaboration.

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