APG, IFC & AIIB in race to put $250 million into Mahindra InvIT

Mumbai: Dutch pension fund APG Asset Management, the World Bank’s investment arm International Finance Corp (IFC) and Asian Infrastructure Investment Bank (AIIB) are in a race to invest up to $250 million (₹2,080 crore) in Mahindra Susten’s renewable infrastructure investment trust (InvIT), said two people aware of the development.

ET first reported on April 26 that several global investors including APG had evinced preliminary interest in investing in the Mahindra InvIT.

Mahindra Susten’s businesses include the Mahindra Group’s renewable-focussed engineering, procurement and construction (EPC) unit (with more than 4 GW of capacity constructed) as well as an independent power production (IPP) unit with around 1.54 GW of operational solar plants. The entire 1.54 GW will be transferred to the InvIT.

The portfolio has an enterprise value of about $1 billion, the sources said.
“APG, IFC and AIIB are currently conducting due diligence on the assets that are part of the InvIT,” said one of the persons. “The deal is likely to close in the next two to three months.”


Local Investors may Chip in Later
“It will include a mix of primary and secondary share sale for a minority stake of around 35% in the InvIT,” the person said.

Bringing a new investor on board will also help the InvIT move toward meeting norms that require an InvIT to have a minimum five shareholders, said one of the persons.

“Susten will later on bring in a few domestic investors such as mutual funds or family offices with small cheques to meet the minimum shareholder requirements,” the person said.

Currently, Canadian fund Ontario Teachers’ Pension Plan Board (OTPP) owns about 30% stake of Mahindra Susten, acquired in September 2022 for ₹2,371 crore ($300 million). OTPP will end up holding a stake in the InvIT too, along with the holding in Mahindra Susten.

The Mahindra Group and AIIB didn’t respond to queries. APG and IFC declined to comment.

Axis Capital, Kotak Investment Bank and Avendus Capital are advising Mahindra Susten on the transaction.


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