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Baring Private Equity Partners, Aditya Birla Private Equity eye 20 per cent stake in Anu Solar Power

According to reports, Baring Private Equity Partners and Aditya Birla Private Equity are in the running to buy a 20 per cent stake in Anu Solar Power in a transaction which could value the Bangalore-based company at Rs 500 crore. The deal to invest Rs 100 crore is expected to close by the end of September, a person with direct knowledge of the negotiations said. Anu Solar Power, which makes solar inverters, water heaters and provides off-grid power solutions, reported revenue of Rs 60 crore in the financial year 2011-12. Advisory firm Ernst & Young is the lead arranger.

Baring Private Equity Partners refused to confirm any development around the potential investment while Aditya Birla Private Equity did not reply to an email sent by ET.

The deal, if consummated, will underscore the rising interest by private equity players in India’s renewable energy space, which is receiving policy support in the form of tax incentives, accelerated depreciation and capital subsidies.

The government has set a target of 30,000 MW in capacity from renewable sources by 2017.

“When it comes to cost parity, off-grid products in the solar space are definitely taking off, and at the consumer level, solar looks like being a very good bet,” said Satish Chaluvadi, director at private equity firm MCap Fund Advisors.

India’s solar power sector saw investments totalling $4.2 billion last year, a seven-fold increase over 2010 investment numbers, as private capital rushed to invest in fund grid-connected solar projects.

“India has the required potential, demand and regulatory support to develop into a global solar powerhouse. Cost of solar photo-voltaic modules also continue to drop, and project execution has been strong,” Pravan Malhotra, senior investment officer – Clean Technology Private Equity at IFC, said.

Recent prominent transactions in the solar power space include Argonaut Ventures, Bessemer Venture Partners and New Silk Route Partners’ $50 million (Rs 275 crore) investment in Kiran Energy Solar Power in late 2011. In April this year, Asian Development Bank announced that it would lend $103 million to the Anil Ambani-controlled Reliance Power to fund a solar power project in Rajasthan.

However, Malhotra also said there was an increased requirement for rationalised project bidding and availability of funding, especially from local lenders.

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