The Mahindra Group and the Ontario Teachers’ Pension Plan have announced a strategic collaboration to capitalise on India’s growing renewables opportunities and contribute to the country’s carbon reduction goals. The parties have signed binding agreements wherein Ontario Teachers’ will purchase a 30 per cent equity stake in Mahindra Susten for Rs 23.71 billion.
The proposed transaction also includes the formation of an Infrastructure Investment Trust (InvIT) in accordance with applicable regulations of the Securities and Exchange Board of India. The initial proposal is for the InvIT to consist of renewable power assets seeded by Mahindra Susten with an operational capacity of approximately 1.54 GWp. As part of the proposed transaction, the Mahindra Group will repay Rs 5.75 billion in shareholder loans advanced to Mahindra Susten.
The Mahindra Group will receive approximately Rs 13 billion as a result of this transaction. By May 31, 2023, Mahindra Group and Ontario Teachers’ will jointly explore the sale of an additional 9.99 percent stake in Mahindra Susten. Over the next seven years, Mahindra Group will invest these funds, plus an additional amount of up to Rs 17.5 billion, in the business and InvIT. During the same time period, Ontario Teachers’ has committed to invest an additional Rs 35.5 billion in the business and the InvIT over the next seven years.