State-run Convergence Energy Services Ltd (CESL) is looking to raise around $500 million ( ₹3,713 crore) from the sale of up to 50% stake in its decentralized solar and electric mobility business at the asset level.
It is in discussions with both Indian and global investors, and has mandated Deloitte to run the sale process, said a top company executive.
The proposed transaction follows environment, sustainability and governance funds’ growing focus on India, considering that climate change is a clear and present danger as articulated by the UN’s Intergovernmental Panel on Climate Change report, which said extreme weather events will impact lives, livelihoods and businesses in India and South Asia, and called for immediate steps to mitigate climate change.
Earlier this month, CESL called for bids to buy 100,000 electric three-wheelers at an estimated cost of ₹3,000 crore—the largest such global tender. CESL plans to raise $100 million for this procurement. Besides, it is looking to raise $200 million, each, for supplying electric buses and two-wheelers, and setting up solar plants.
CESL’s parent, Energy Efficiency Services Ltd (EESL), is responsible for demand aggregation of electric three-wheeler and bus components under the ₹10,000 crore Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (Fame) scheme of the government. CESL aims to have 200,000 electric two-wheelers and 300,000 three-wheelers across India.
“Meeting the business needs of CESL and the huge demand that we are seeing from cities and states alike for electric mobility, we will need serious money to deliver on expectations. While I’m thrilled to see such demand, I’m also aware of the time and effort it takes to raise capital. We are, therefore, exploring all sorts of solutions, including off-balance sheet constructs, co-lending, multilateral funds and, of course, regular equity based structures,” said CESL managing director and chief executive officer Mahua Acharya.
A Deloitte spokesperson declined to comment on Mint’s queries.
CESL is planning to call a ‘grand challenge’ among nine major metros to allocate electric buses, with around 7,408 e-buses expected to be offered under the Fame scheme, which has been extended by two years till 31 March 2024. In addition to supplying electric two-wheelers to states such as Andhra Pradesh, Kerala and Goa, it has also been aggregating demand for leasing out and operating electric three-wheelers for garbage collection for municipalities across India, including the Pune Municipal Corporation.
Source: Mint