Adani Green Energy Ltd (AGEL) has completed the acquisition of SB Energy Holdings Ltd (SB Energy India) in an all-cash deal for which definitive agreements were signed on May 18, 2021.
With this deal, SB Energy India is now a 100 per cent subsidiary of AGEL. Earlier, it was a 80:20 joint venture between Japan-based SoftBank Group Corp and Bharti Group.
The transaction pegs SB Energy India at an enterprise valuation of USD 3.5 Billion (Rs 26,000 crore) and marks the largest acquisition in the renewable energy sector in India.
Just last week, Adani Group Chairman Gautam Adani had announced that the Group would invest over $ 20 billion across the next 10 years in renewable energy generation.
"This transaction takes us closer to becoming the global leader in renewables," said Vneet S. Jaain, MD & CEO, AGEL.
"The addition of these high-quality large utility-scale assets from SB Energy India demonstrates Adani Green Energy's intent to accelerate India's efforts to transition towards a carbon neutral future. Our renewable energy foundations will enable an entire ecosystem of new industries that can be expected to catalyse job creation in multiple sectors."
SB Energy India has 5 GW renewable assets across four states in India through its SPVs. The portfolio holds 1,700 MW of operational renewable assets, 2,554 MW of assets under construction and 700 MW of assets near construction. Solar capacity accounts for 84 per cent of the portfolio (4,180 MW), wind-solar hybrid capacity accounts for 9 per cent (450 MW) and wind capacity accounts for 7 per cet (324 MW).
Split across 15 projects with an average project size of 330 MW, this is one of India's highest quality renewable portfolios, with many of the assets being solar park-based projects and constructed using best-in-class governance, project development, construction and operations and maintenance standards.
The value accretive acquisition boosts AGEL's operational portfolio to 5.4 GW and its overall portfolio to 19.8 GW implying a 4x growth locked-in. AGEL's counterparty mix for its overall portfolio of 19.8 GW is further reinforced with 87 per cent sovereign rated counterparties.
The Adani Renewable Energy (MH) Limited (AREMHL), a wholly-owned subsidiary of Adani Green Energy Ltd (AGEL), will acquire a 40MW operating solar project in Odisha.
The AREMHL has signed definitive agreements with Essel Green Energy Pvt Ltd to acquire 100 per cent economic value in a special purpose vehicle (SPV) that owns the solar project in Odisha, the company said in a statement on Thursday.
The project has a long-term Power Purchase Agreement (PPA) with Solar Energy Corporation of India (SECI) for Rs 4.235 per unit, with remaining PPA life of about 22 years, the company said.
The closing of the transaction is subject to customary conditions. The acquisition of the project is at an enterprise valuation of Rs 219 crore.
Vneet Jaain, managing director & CEO of Adani Green Energy Ltd., said, "With the acquisition of this project in Odisha, AGEL will now have its footprint across 12 States in India. We are on an expansion path that will make us the world's largest renewable player by 2030."
With this acquisition, AGEL will achieve a total renewable capacity of 19.8 gigawatts (GW). The total portfolio includes 5.4 GW operational assets, 5.7 GW assets under construction and 8.7 GW near construction assets.
Gautam Adani, the Chairman of the Adani Group, on Monday coined the slogan "A greater India is visibly an India for Indians" as the country embarks on a journey of growth.
Adani was speaking at Priyadarshni Academy's 37th Global Awards where he was conferred the Ramakrishna Bajaj Memorial Global Award.
"Such an approach is not about politics - but is about the emerging world order. If there ever was a time when democratic India had a need and opportunity to stand strong and celebrate its Indianness, it is now - at the doorstep of decades of future growth. The dimensions - our history, culture and boundaries - must now combine to encapsulate the nation, bind the nation, and instil a sense of patriotism in the nation," Adani said.
"Be it sustainable technologies for a greener world, digital technologies for a more connected India, education solutions for a more literate India, medical solutions for a healthier India, agricultural solutions for the farmers of India and all the enabling infrastructure - these are all trillion-dollar opportunities ahead in the not-too-distant future," he said.
"They lay the foundation for our 'Aatmanirbharta'. This journey must be led by companies from our own nation that compete at some levels and yet collaborate at other levels. India's massive growth offers opportunities for all. The guiding North Star must be 'A greater India is visibly an India for Indians'," Adani added.
He said India had nothing to do with the Covid virus but sustained some of the most drastic consequences and criticism on the global stage.
"There was not a single major international voice of understanding. All this had the gravitas to not criticise any country as they fought their own battles to control the virus," he added.
"The fact that we have fought back should in itself be a lesson for all of us that there can be no better defence than 'Aatmanirbharta' to mitigate future black swan events.
"We should never find ourselves in such a position ever again. This requires muscle - to stand up to the pressures global organisations can bring to bear. Over the next two decades, India will have the biggest and the youngest middle class that ever existed. We will be the market that every global company will target. In this euphoria, let us never forget that we were largely left alone to fight the pandemic," Adani said.
"This does not mean that there cannot be any criticism. However, criticism cannot be at the cost of national dignity. It cannot be at the cost of destroying the confidence of a nation. It cannot be about dividing the society - else we play right into the hands of those that do not want to see a resurgent India," Adani added.
As the Chinese real estate behemoth Evergrande Group landed in a serious crisis, revealing the real hidden problems of the country's property market driven by shadow banking, business community across the world is carefully watching the developments. A tumbling real estate sector in China could affect the world economy.
According to the Institute of Chinese Studies (ICS), China's household debt in December last year was estimated at 150 percent of its disposable income. This was also marked by a rise in property prices and seems to be concentrated among the millennials.
"There have been serious over-investment in several sectors in China, real estate being just one of the many. So, there are issues but since there is little transparency regarding data, it is difficult to assess the intensity of the problem," Shakti Sinha, Director, Atal Bihari Vajpayee Institute of Policy Research and International Studies, MS University earlier told India Narrative.
The Evergrande crisis has brought out a critical issue -- the problem of high and unsustainable debt that several Chinese firms may be getting caught in at this juncture when the world economy is going through testing times amid the Covid 19 pandemic and shifting geopolitical contours.
China, which has remained focused on economic growth, has been witnessing a surge in its overall debt level - whether it is for local governments or corporates.
High credit has been a pillar of China's economic growth. The ICS said the high credit borrowing has also put a strain on the financial institutions of the country. Besides, "zombie" companies that have little to no productive use, are borrowing more and more simply to meet their current obligations.
The ICS study also pointed out that several state-owned and private companies in China have property subsidiaries, and property loans made to these subsidiaries are sometimes presented in the books as going to the parent company. "This results in the share of property-related debt being much higher than what is available in the official data."
Earlier, Reuters reported that China's corporate bond defaults hit a record high this year, highlighting tightening credit conditions and a growing reluctance by regional governments to bail out troubled state-owned firms.
Chinese companies' bond defaults amounted to 62.59 billion yuan -- $9.67 billion in the first half of 2021, the highest ever, according to Fitch Ratings.
"That increasing proportion of defaults by state-owned enterprises (SOEs) has raised concerns among some investors that the end of implicit government guarantees on SOE debt could create market instability," it said.
OYO on Friday announced that it has raised a TLB (Term Loan B) funding of $660 million from global institutional investors.
A company statement said that the offer was oversubscribed by 1.7 times and the company received commitments of close to $1 billion from leading institutional investors.
The deal was upsized and increased by 10 per cent to $660 million as the company's fundamentals yielded strong interest from investors despite the virus surge.
The interest margin rate was also lowered by 25 basis points from the Initial Pricing Guidance to LIBOR+825 basis points.
The company will utilise these funds to retire its past debts, strengthen the balance sheet and other business purposes including investment in product technology, it said.
OYO is the first Indian startup to be publicly rated by Moody's and Fitch, two of the leading international rating agencies.
Fitch and Moody's rated OYO's senior secured loan B and B3 (stable outlook), respectively, on the back of the company's sound business model and resilient financial profile with significant potential upside.
This is a milestone transaction as OYO is the first Indian company to raise capital through the TLB route
Abhishek Gupta, Group Chief Financial Officer, OYO, said: "We are delighted by the response to OYO's maiden TLB capital raise that was oversubscribed by leading global institutional investors. We are thankful for the trust that they have placed in OYO's mission of creating value for owners and operators of hotels and homes across the globe.
"This is a testament to the strength and success of OYO's products at scale, our strong fundamentals and high-value potential. OYO is well capitalized and on the path of achieving profitability. Our two largest markets have demonstrated profitability at the slightest signs of industry recovery from the COVID-19 pandemic".
JP Morgan, Deutsche Bank, and Mizuho Securities served as the lead arrangers for this financing.
Rising retail participation in the stock market can enable to create a larger resource pool for financing India's infrastructure requirements, according to an SBI Ecowrap report.
It further said that in case retail investments in the stock market increases to 1 per cent of GDP and further even if half of this can be tapped and channelised into infrastructure spending, then it can cover around 24 per cent of the IBER (other than railways) of the government in FY22.
"Other option for financing infrastructure that is also being explored is the InvIT (Infrastructure Investment Trusts). Government owned Financial Institutions like PFC, REC etc. are setting up InvITs and providing equity capital for new projects. These are all positive developments in the long term financing story of India," said the report authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.
The report noted that with the onset of pandemic and subsequent lockdown, household financial savings had initially showed a significant jump in Q1 FY21, and then a sharp moderation in Q2 FY21. However, the data shows that currency in circulation again increased in Q3 and Q4 FY21.
Furthermore, the markets have progressively improved with Sensex increasing from 28,265 at the beginning of April 2020 to above 52,000 now, it said. This has led to increased investment in stocks and mutual funds in H2 FY21 and this higher retail participation in stock markets may become more of a self-fulfilling prophecy.
The number of individual investors in the market has increased by a whopping 142 lakh in FY21, with 122.5 lakh new accounts at CDSL and 19.7 lakh in NSDL. Furthermore, another 44.7 lakh retails investor accounts have been added during the two months of this fiscal.
Also, the share of individual investors in total turnover on stock exchange has risen to 45 per cent from 39 per cent in March 2020, as shown, by NSE data.
Within retail, maximum allocation has been to financials, followed by consumer staples, energy and IT. Globally, there has been significant increase in the market capitalization in stock markets across the world in the last one year.
However, in India it has been higher than other major countries. The market capitalization of Sensex has increased by 1.8 times its value one year ago. However, sector-wise 1-year return in Indian stock markets indicates that IT and Materials have performed better and IT.
"This clearly indicates the movement in Indian stock markets is increasingly being clearly interlinked with a supposed infrastructure power play in coming days."
There is also a renewed interest in healthcare stocks and of course financial stocks with stories of Indian financial ecosystem being effectively acting as a conduit of large liquidity finding investment avenues.
Lower rate in other saving avenues amidst the low interest rate regime has led to greater interest by individuals in the stock market.
Another reason could be the significant increase in global liquidity, it noted. Additionally, the pandemic which has resulted in people spending more time in their homes might also be another reason for individuals' tilt towards the stock market trading.
The Ecowrap report, however, said it is yet to be seen if this increasing retail participation is transitory or the beginning of long-term behavioural change. Additionally, the rise in stock market without significant development in real economy may raise issue of financial stability which as per our financial stability index shows modest improvement in April 2021, but lower than the peak witnessed in December 2020.
However, it is expected to have declined in May 2021.
In yet another acquisition for Tata Steel under the Insolvency and Bankruptcy Code, its wholly owned subsidiary, the Committee of Creditors (CoC) of Rohit-Ferro Tech Ltd has declared Tata Steel Mining as the successful resolution applicant for the insolvent ferro alloy manufacturing company.
The National Company Law Tribunal (NCLT) will have to next approve the resolution proposal.
"Tata Steel Mining Limited (TSML), a wholly owned subsidiary of Tata Steel Limited has been declared as the successful resolution applicant by the Committee of Creditors for acquisition of Rohit Ferro-Tech Limited ('RFT') on June 5, 2021, subject to it obtaining necessary regulatory approvals including approval from the National Company Law Tribunal (NCLT)," Tata Steel said in a regulatory filing.
TSML has accepted the Letter of Intent (LoI) for acquisition of RFT under the Corporate Insolvency Resolution Process (CIRP) of the IBC.
Around 11 a.m., shares of Tata Steel on the BSE were at Rs 1,136.10, higher by Rs 16.20 or 1.45 per cent from its previous close.
The resurgence of Covid-19 will adversely impact the occupancy rates of India's hotel industry for another two-three months, ratings agency ICRA said.
The pandemic's second wave has plunged the sequential occupancy rates of the industry.
Accordingly, the occupancy rate had sequentially dipped from 45 per cent in March 2021 to 32-34 per cent in April 2021 and further to about 25-27 per cent in May 2021.
The occupancy rate had fallen to lows of 13-15 per cent during the first few months of FY2021 and demand was largely limited to Vande Bharat repatriation travelers, medical or other frontline workers, stranded travelers and work-from-hotel guests.
After hotels reopened gradually from Q2 FY2021, demand came from staycations, drive-to-leisure and wedding 'Meetings, Incentives, Conferences, and Exhibitions' (MICE) and occupancies inched closer to 50 per cent in Q4 FY2021 providing a healthy dose of optimism to the industry.
As per ICRA, the recently expanded scope of ECGLS has come as a relief for larger hotel companies.
Under the expanded scope of the scheme, Centre has recently removed Rs 500 crore ceiling cap on loan outstanding for eligibility under the ECLGS 3.0, subject to a maximum assistance of Rs 200 crore or 40 per cent of the borrowings whichever is lower.
Centre had launched the ECLGS in May 2020 to protect the MSME sector from the massive economic upheaval caused by the pandemic.
"About 70 per cent of ICRA's hospitality portfolio applied for moratorium during the first wave," said Vinutaa S, Assistant Vice President and Sector Head, ICRA Ratings.
"Subsequently, most companies availed debt under ECLGS 1.0 and 2.0, and through other long-term debt to shore up their liquidity for meeting operational and financial commitments. Some companies also resorted to equity fund raising from investors and promoters."
According to ICRA, the recent expansion is a welcome move and is expected to benefit larger hospitality companies.
"About 32 per cent of ICRA rated debt is incrementally eligible for loan availment because of the cap removal."
Besides, a severe impact of the pandemic has resulted in a sharp increase in downgrades.
"About 70 per cent of the entities are on negative credit outlook, compared to 92% of the entities with stable outlook in January 2020," ICRA said.
"The industry credit profile is expected to weaken with the second wave derailing the recovery momentum and this could result in more negative rating actions."
Currently, ICRA expects the occupancy and 'RevPAR' to be adversely impacted, at least over the next two-three months because of the second wave.
"The industry 'RevPARs' would be tied to the pandemic timelines, although widespread vaccination rollout would ease the situation to an extent."
"The situation is still evolving and remains a monitorable. Recovery to pre-Covid levels is still at least two years away."
Mumbai, May 12 (IANS) Over 7,400 office space leases spanning around 90 million square feet area will come up for renewal in 2021 across the top six cities -- Bengaluru, Mumbai, Pune, Chennai, Gurugram and Noida, as per the Anarock data.
Data further reveals that 2021 has the highest lease expiry pipeline when compared to the next two years, 2022 and 2023.
The next year will see nearly 7,000 leases for around 78 million square feet come up for renewal and around 4,200 leases for over 55 million square feet in 2023.
Out of the around 7,400 leases expiring in 2021, Mumbai has the highest share at about 44 per cent, followed by Pune with a 17 per cent share. These two cities have been among the worst-affected by the second wave. The impact on leasing activity there over the year bears watching.
The total number of leases coming up for renewal in 2021 account for 90 million square metres area. In terms of area, Bengaluru has the largest share at about 37 per cent, with Mumbai coming in a distant second with a share of about 19 per cent.
Anarock Property Consultants Director & Head of Research Prashant Thakur said: "The office market has been under strain since the pandemic came in. However, the IT/ITeS sectors have been on a hiring spree in 2020 and 2021 due to massive business accruals.
"To accommodate these employees in a future when we see a gradual return of employees and adoption of hybrid workplace practices by infotech giants, office space demand will grow."
"Office demand also is expected to gather momentum from 2022 in the wake of robust hiring by large corporates. These big corporates will definitely renew their leases, though some of the smaller companies may consider rationalising space," he added.
"The leases coming up for renewal in 2021 were entered into at much lower rentals - at rates that prevailed 3 to 5 years ago - since office leases are usually signed for the long-term. There is some room for rental escalation in many of these leases," he added.
The price gap between ready-to-move-in and under construction homes has declined to just 3-5 per cent in the first quarter of 2021, according to a report by Anarock Property Consultants.
It noted that the price gap between ready and 'off plan' or under-construction housing has been narrowing on year-on-year basis since 2017 across the top seven cities.
In 2017, the difference between the two categories was anywhere between 9 per cent to 12 per cent across cities, while in 2018 it was 5-8 per cent.
The National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) recorded the least price difference between ready-to-move-in and under construction homes at 3 per cent.
The average prices of RTM homes in NCR were Rs 4,650 per square feet while for under construction homes it was Rs 4,500 per square feet and in MMR it stood at Rs 10,700 per sqaure feet and Rs 10,350 per square feet respectively.
Pune, Hyderabad and Chennai have the highest RTM/UC price difference at around 5 per cent. In Bengaluru and Kolkata, the difference is just 4 per cent.
"Previously, buyers of under-construction homes had one major advantage," said Anuj Puri, Chairman of Anarock Property Consultants, adding that "their patience and willingness to court construction risk were rewarded by notably lower prices."
However, construction delays and stalled projects had a predictable outcome and risk-aversion set in, with demand tilted heavily towards ready properties. While the fact that RTM homes do not attract GST has been an added attraction, even the price gap between RTM and UC homes has eroded substantially, from 9-12 per cent in 2017 to just 3-5 per cent by Q1 2021, Puri said.
The shrunk price gap works well for end-users as well as investors. End-users can see what they buy and save rent by moving in immediately, while investors focused on steady rentals can start earning right away, said the report.
In the past four years, developers have been reluctant to increase the prices of ready homes as they need to clear their inventory. "Not surprisingly, ready homes are the 'in' thing," it said.
Amid revival in housing demand, the residential segment witnessed private equity (PE) investments worth $234 million in Q1 2021 which was 64 per cent of that witnessed during the entire 2020, said a Knight Frank India report.
It noted that in terms of the number of deals, the investment activity touched 100 per cent of 2020 levels and 39 per cent of 2019 levels in the first three months of 2021.
The report titled 'Investments in Real Estate - Trends in PE Investment (Q1 2021 update)' said that Indian real estate attracted private equity (debt and equity) investments ($3.24 billion) across 19 deals in Q1 2021 (January - March) period.
In the first quarter of 2021, the investment in the sector has grown by 16 times compared to $199 million in Q1 2020.
The investments in Q1 2021 in value terms were 80 per cent of that witnessed in full year 2020 and 48 per cent of full year 2019.The strong momentum in Q1 2021 was predominantly driven by two major factors, spillover of certain deals from 2020 and the rise in investor confidence due to the drop in Covid-19 infections during early parts of Q1 2021, which had created some ripples of positivity in the economy, it said.
The sustainability of this momentum in investors' sentiments will therefore depend on how soon the second wave of infection subsides and also the pace of vaccination, as per the Knight Frank India.
Out of the total PE investments in real estate, the office segment attracted 71 per cent share, followed by retail at 15 per cent, residential and warehousing with 7 per cent each respectively.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said: "The deal street market of Indian real estate witnessed an impressive surge in both value and volume of private equity investments in the first quarter of 2021, when compared to the entire year of 2020."
He said that office assets continue to be the preferred segment attracting over 70 per cent of PE investments Q1 2021 as the segment moves towards maturity which includes sustained demand, stability in rental income and change in ownership profile over long -term. Investors are expecting demand to recuperate faster as the pace of vaccination increases.
"While Q1 2021 has been an encouraging quarter for PE investments, however, the upward trajectory can be impacted by the rising second wave of Covid-19 infections in India which started in the month of April 2021. The sustainability of revival in investor sentiments will therefore depend on how soon the second wave of infection subsides and the pace of vaccination," Baijal said.