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June 14, 2016

Further Consolidation in Renewable Energy Space?: Mint

In an article titled "Tata Power-Welspun deal brings focus back to M&As in renewables", Mint's Swaraj Singh Dhanjal uses Venture Intelligence data to forecast consolidation in the green energy space:

1. According to Venture Intelligence, the year 2015 saw 14 M&A deals in the renewable space worth $2.27 Billion. (2016 has seen only 3 M&A deals in the Renewable Space including the Tata Power - Welspun Deal)


2. Opportunities for M&A exist in renewable project companies that were built in the in earlier waves of renewable energy development. (Want a Peek into the List? Try out our Cleantech Deals Database)

3. Large Companies are actively pursuing M&A route to scale up due to the long time scale required for pre-development work, such as in wind, or the uncertainties of competitive bidding in solar (e.g. solar bids routinely attracting 60-70 bidders). M&A guarantees scaling-up in a manner that green-field development cannot.

4. Highly competitive bidding for projects has also lead to lower economic returns.

While  the above factors have been given as reason for further consolidation, Rahul Mody, Ambit Corporate Finance and Kameswara Rao, PWC opine that the consolidation in the sector could be a short lived one due to

1. Limited number of renewable assets in the market

2. With the Indian Government's ambitious target to generate 320 GW through renewable energy sources by 2030, the market is attracting a large number of new players - meaning the market is in fact becoming broader rather than consolidating

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. 

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