Mahindra Group and Ontario Teachers’ Co-Sponsor India’s Largest Renewable Energy InvIT with INR 2262.8 Crore Offering

Mahindra Group, a prominent player in farm equipment, utility vehicles, information technology, and financial services in India, has collaborated with the Ontario Teachers’ Pension Plan Board to co-sponsor an Infrastructure Investment Trust (InvIT) named ‘Sustainable Energy Infra Trust’ (SEIT). SEIT, India’s largest InvIT in the renewable energy sector, successfully raised primary capital of INR 1365 Crore (USD 165 Million) in its initial unit offering. The offering garnered substantial support from global and Indian investors, including the Asian Infrastructure Investment Bank (AIIB), marking SEIT’s debut on the National Stock Exchange of India Limited.

Aligned with the commitment of Mahindra Group and Ontario Teachers’, SEIT aims to significantly contribute to the growth of the renewable energy sector in India. It currently holds operational renewable power assets with a generation capacity of approximately 1.54 GWp, initially seeded by Mahindra Susten. The capital infusion of INR 897.8 Crore (USD 108 Million) through the offer for sale of SEIT units will strategically position Mahindra Susten for enhanced growth and the development of a future pipeline of renewable energy assets.

As part of their growth strategy, Mahindra Susten and SEIT have established a Right Of First Offer (ROFO) arrangement, in compliance with InvIT Regulations. This agreement ensures that renewable energy assets developed by Mahindra Susten will be prioritized for sale to SEIT. Mahindra Group and Ontario Teachers’ had earlier committed to investing up to INR 3050 Crore (USD 368 Million) and INR 3550 Crore (USD 428 Million), respectively, in Mahindra Susten and SEIT.

Dr. Anish Shah, Group CEO & MD of Mahindra Group, expressed confidence in SEIT’s listing as evidence of the group’s ability to attract strong external investors. He emphasized Mahindra Susten’s ambitious plans for 5X growth in the next five years, aligning with both the group’s and the nation’s green energy goals. The renewable energy sector’s continued growth and attractiveness to investments were highlighted, with excitement about the pivotal roles of Susten and SEIT in shaping the right ecosystem.

Deb Hajara, Managing Director of Infrastructure & Natural Resources at Ontario Teachers’, expressed pride in co-sponsoring SEIT and contributing to India’s renewable energy ambitions. The milestone reflects their commitment to global investments in green and transition assets and underscores the attractiveness of renewable energy investment opportunities in India.

Avinash Rao, CEO of the Investment Manager to SEIT, emphasized the significant growth potential in India’s renewable energy sector. The investor-friendly nature of InvIT as an instrument and the government’s focus on sustainable energy make the industry highly attractive for investments. The involvement of strong sponsors such as Mahindra Group, Ontario Teachers’, AIIB, and other marquee investors for existing and future assets was acknowledged.

The transaction was facilitated by Kotak Mahindra Capital Company Limited, Axis Capital Limited, and Avendus Capital Private Limited as Placement Agents. Legal counsel to SEIT and the Sponsors was provided by Cyril Amarchand Mangaldas, with S&R Associates serving as legal counsels to the Placement Agents.