According to reports, the $12.5 billion Mahindra group is diversifying into solar energy through its in-house private equity arm Mahindra Partners. The solar business, part of Mahindra’s Clean Tech vertical, will be involved in on-grid solar plants, off-grid or captive solar plants, solar power products and EPC contracts. Mahindra Solar has already bagged a 5MW project in Rajasthan which will be up and running by January 2012. It will also bid for projects in states like Gujarat, Rajasthan and Karnataka, which are taking the lead in solar energy under the National Solar Mission. The solar business will look for private equity participation once it goes beyond what the company calls the “testing and incubation” stage. Mahindra Clean Tech is also interested in getting into water treatment and water management as well as energy efficiency as business opportunities under the Clean Tech vertical.
Speaking to TOI, Parag Shah, managing partner, Mahindra Partners said: “Under Mahindra Partners – which not only handles diversified businesses like logistics, steel, retail but also incubates new businesses – we have been researching clean technologies for the past two-and-a-half to three years. We have launched the Clean Tech vertical by incubating Mahindra Solar. Given India’s energy needs and fact that the government is backing it up through the National Solar Mission makes this an interesting opportunity. Combined with Mahindra’s frugal engineering skills the larger corporate philosophy captured by the ‘Rise’ campaign, this is a sector we definitely want to be a part of.”
Mahindra Solar will have three different business lines. It will have an on-grid business which will contribute power to the grid. It will also have an off-grid business for captive solar plants as well as a solar power product line. Besides it will undertake EPC (engineering, procurement and construction) contracts to build solar power plants. Mahindra EPC is executing the Rajasthan project in which Mumbai-based Kiran Energy – a solar energy start up founded by Ardeshir Contractor, formerly head of KPMG’s Investment Banking business in India, and Alan Rosling, a former Executive Director of Tata Sons – has taken a “significant stake,” said Shah. “As we go along we may invite private equity players or more strategic partners like Kiran Energy,” he added.