Torrent Power on Tuesday said it has entered into a share purchase agreement to buy the entire stake in 156 megawatt (MW) of wind power plants from CESC at an estimated enterprise value of Rs 790 crore.
The enterprise value, subject to closing price adjustments, comprises equity of Rs 295 crore, debt of Rs 475 crore and cash and cash equivalents of Rs 25 crore. The wind plants sell power to the discoms of Gujarat, Madhya Pradesh and Rajasthan at a weighted average tariff of Rs 4.68 per unit. More than 60% of the power purchase agreements of these plants are with the Gujarat discom, at an average tariff of Rs 4.09 per unit.
This acquisition initiates Torrent’s renewable energy presence in Rajasthan and Madhya Pradesh, and is in line with its strategy to strengthen its position in the renewable energy sector. With the acquisition of 156 MW wind plants, Torrent Power’s total generation capacity, including under development portfolio, will reach to around 4,900 MW with renewable portfolio of more than 1,800 MW. The company’s current installed generation capacity of 3,879 MW consists of 2,730 MW gas-based plants, 787 MW renewable energy and around 362 MW of coal-based capacity.
The wind plants acquired by Torrent Power is held by Surya Vidyut, a CESC subsidiary. The transaction is expected to be completed within the next 60 days. The company set up the first 24 MW wind plant in Rajasthan in FY13, followed by the 26 MW project in Gujarat in FY15, 36 MW in Madhya Pradesh in FY16 and the 70 MW Gujarat plant in FY18.