State-owned ONGC (Oil and Natural Gas Corporation), India’s largest crude oil and natural gas company, is reportedly the front-runner to acquire a majority stake in Ayana Renewable Power, which is backed by the National Investment and Infrastructure Fund (NIIF). This information comes from sources familiar with the matter, who spoke to Moneycontrol on the condition of anonymity.
Key Details of the Acquisition
- Ownership Structure: NIIF holds a 51% stake in Ayana Renewable Power, making it the controlling shareholder. Other stakeholders include British International Investment (32%) and Eversource Capital (17%) [1].
- Stake for Sale: The exact percentage of the stake available for sale has not been disclosed [1].
- Valuation: ONGC and JSW Neo Energy were shortlisted for the final round of bidding, with offers ranging between $1.6 billion and $1.8 billion in enterprise value [1].
Financial Context
- Investment Background: Ayana’s co-investors have committed $721 million in equity funding, with the company’s debt estimated to be between $800 million and $1 billion [1].
- ONGC’s Financial Position: ONGC has experienced a 46.27% rise in its share price over the past year and has a history of significant acquisitions, including the purchase of a 51% stake in HPCL for approximately Rs 36,912 crore in 2018 [1].
ONGC’s Renewable Energy Strategy
In July 2024, ONGC released a decarbonization roadmap aimed at achieving net-zero operational emissions (Scope 1 & Scope 2) by 2038. The company plans to invest around Rs 2 lakh crore in renewable energy projects and green hydrogen plants while also working to eliminate gas flaring [1].
Ayana Renewable Power’s Growth Prospects
According to a ratings report by ICRA dated September 5, Ayana Renewable Power is expected to expand its portfolio to 4.6 GW with the pending equity capital and cash surpluses from existing projects. The company currently operates a renewable power portfolio of 1.59 GW, which has increased from 1.29 GW in July 2023. Additionally, Ayana has approximately 3 GW under development, including solar, wind, and hybrid assets, with firm power purchase agreements (PPAs) in place [1].
The potential acquisition of Ayana Renewable Power by ONGC represents a significant move towards enhancing the company’s renewable energy portfolio and aligns with its broader strategy to transition to sustainable energy sources.
Learn more:
- Ayana greenlights JSW unit & ONGC into final round; renewable energy co valued at up to $1.8 bn – The Economic Times
- JSW Neo Energy and ONGC Reportedly into Final Round to Acquire Ayana Renewable – MarketScreener
- JSW Neo, Sembcorp, ONGC Reportedly Shortlisted to Acquire NIIF Backed Ayana in $800 Million Deal – MarketScreener
