After its foray into real estate space, leading private equity firm Warburg Pincus India Pvt Ltd is forging ahead in the power sector and has invested $150 million in Bhopal-based Diligent Power Pvt Ltd for an undisclosed stake.
Diligent Power, through its subsidiaries, is in the process of setting up power projects aggregating to 6,400 MW. These projects include a 1,200 MW coal-based thermal power plant in Chhattisgarh and a 1,320 MW super critical thermal power plant in Madhya Pradesh. With the funding, the company is planning to accelerate its growth plans.
“The Indian power sector is experiencing a significant growth phase, with high GDP growth resulting in an increased demand for electricity. Significant capacity additions will be required in generation, transmission and distribution to fulfil this demand and implement the government’s ambitious ‘Power for All’ project. Diligent Power has planned some long-term initiatives to capitalise on the huge potential presented by the sector,” said R K Gupta, CEO, Diligent Power.
Avendus Capital Pvt Ltd acted as financial advisor while Amarchand & Mangaldas & Suresh A Shroff & Company Ltd acted as legal advisor to Diligent Power. AZB & Partners acted as legal advisor to Warburg Pincus on the transaction.
Currently, Warburg Pincus has more than $30 billion in assets under management. Its active portfolio of more than 110 companies is highly diversified by stage, sector and geography.
Over the past decade, Warburg Pincus has invested almost $2.5 billion in Indian companies. The firm’s past and current investments in India include Ambuja Cements, Bharti Airtel, DB Corp, Gangavaram Port, Havells, HDFC, ICICI Bank, IMC, Kotak Mahindra Bank, Lemon Tree Hotels, NDR Group, Max India, Metropolis Healthcare, Piramal Healthcare, Quest Global, Punj Lloyd, Sintex and WNS Global Services.
The PE firm has recently joined hands with Lemon Tree Hotels Company Pvt Ltd for an affordable housing venture. The two firms have formed the joint venture Oceanus Real Estate Pvt Ltd and will invest over $.30 billion.
The power sector has increasingly witnessed a lot of traction from PE funds. Recently, Avantha Power had raised Rs 217 crore from KKR by placing 9 per cent stake through a pre-IPO placement deal. Some of the largest deals include $425 million in Asian Genco by a consortium led by Morgan Stanley Infrastructure Partners and $305 million fund-raising by GMR Energy from Temasek, IDFC Private Equity, Ascent Capital and others.