Aditya Birla Group is in advanced discussions with domestic lenders to raise approximately ₹14,000 crore through a long-term loan syndication to fund its acquisition of Shell's Indian renewable energy platform Sprng Energy. According to reports from The Economic Times, the proposed financing is being structured as a domestic lending syndication or club loan and is expected to be secured against Sprng Energy's renewable power assets. The loan could have a tenor of up to 20 years, with pricing being discussed below 8% at around 7.7%. This transaction represents one of the largest acquisitions in India's renewable energy sector both by value and scale.
Axis Bank has underwritten the entire amount and is likely to keep a large part of around ₹5,000 crore to the financing, while State Bank of India and HDFC Bank are evaluating commitments for the remaining amount. As reported by The Economic Times, Aditya Birla has also held discussions with six to seven other domestic lenders, but prefers to close the financing with two banks, or a maximum of three lenders. Some international lenders, including MUFG, have evaluated the financing but have been unable to match the pricing offered by the more active domestic lenders, particularly Axis Bank, given the latter's focus and appetite for long-tenor project finance in India.
The transaction values the business at an enterprise value of ₹17,200 crore, making it amongst the largest acquisitions in India's renewable energy sector both by value and scale. According to The Economic Times, the equity consideration payable to the seller will be determined after adjusting for debt, cash, and other items as specified in the transaction documents. The company had stated that the acquisition will be funded through a mix of debt and equity infusion from Grasim and funds managed by Global Infrastructure Partners, a part of Blackrock. This transaction adds a contracted portfolio of around 5 GWp capacity, of which around 3.3 GWp of operational capacity and 1.7 GWp, of under construction capacity, along with a strong connectivity and development pipeline.
The proposed ₹14,000-crore debt facility would therefore represent a substantial portion of the acquisition funding, with the balance expected to be funded through the group's own resources and other sources. As reported by The Economic Times, this transaction comes as Aditya Birla seeks to fund the acquisition with cheaper, longer-duration domestic debt rather than relying on bridge financing. Banks are increasingly competing for large corporate and infrastructure financing mandates as demand for long-duration rupee funding remains strong.
