EQT scraps Zelestra India sale, brings in O2’s Parag Sharma to lead $600 mn push

EQT will also invest around $600 million to develop the portfolio and has appointed Parag Sharma, former chief executive officer (CEO) and founder of EQT and Temasek-backed O2 Power, to head the company, replacing incumbent CEO Sajay KV.

Zelestra had hired JP Morgan to handle the sale of its India operations, eyeing a deal with an enterprise value of $184 million and $421 million respectively. Mint had previously reported that Blackstone, the world’s largest alternative asset manager, wanted to acquire Zelestra’s India operations.

The new plan is to spin off Zelestra India as a separate company and build it on similar lines as O2 Power, which was sold to JSW Neo Energy in December last year for an enterprise value of $1.47 billion.

“EQT is not selling Zelestra India at the moment. The plan is to build another O2 Power. While the sale process, driven by JP Morgan, is ongoing, it has been decided that EQT’s Asia Pacific team will take Zelestra India forward on similar lines as was done for O2 Power,” said one of the four people mentioned above, who requested anonymity. “It will still be held under the EQT Infrastructure V fund, but will be placed with a different partner. The plan is to add another $600 million to the expanded Zelestra India portfolio.”

“The EQT Asia infrastructure team is exiting the Zelestra India operations from Zelestra and will run it as a portfolio company,” said the second person cited above, who did not want to be named. he said.

Sharma, who has joined Zelestra India as its new CEO, declined to comment. Sajay KV did not respond to phone calls or the message left on his mobile phone.

Spokespeople for EQT and Blackstone declined to comment.

Questions emailed to Zelestra and JP Morgan spokespeople on Saturday evening remained unanswered by press time.

Zelestra India has an operational capacity of 600 megawatts (MW) with an additional contracted portfolio of 2 gigawatts (GW), of which 1.5 GW is under construction. The green energy platform targets 8.6 GW capacity by 2031.

Sajay KV took over as CEO of Zelestra’s India business in December 2023, following stints at BrightNight Power, Hero Future Energies, Siemens Gamesa and Vestas.

EQT has assets under management of €273 billion. Zelestra has a global portfolio of 29 GW across 13 countries and has been operating in India since 2015.

India’s green energy capacity growth is on an upward trend. India, which has a solar energy sector potential of 748 GW, has an installed renewable energy capacity of 245 GW, of which 116 GW and 52 GW are solar and wind energy, respectively. The country plans to reach 500 GW by 2030 by adding 50 GW of green energy capacity annually. Given the country’s trajectory towards green energy and its target of net zero by 2070, the plan is to add 1,800 GW of renewable energy capacity by 2047 and 5,000 GW by 2070.

This large-scale green energy field of India has opened up merger and acquisition (M&A) opportunities and attracted the attention of global and local investors.

“The energy sector led $8.5 billion in merger and acquisition activity, driven largely by the growth of the renewable energy sector,” EY wrote in its Aug. 13 report.

“The renewable energy sector in India alone contributes nearly 80% of the energy sector’s total, marking a significant increase from USD 3.2 billion in the first half of 2024 and USD 2.8 billion in the second half of 2024, indicating a strong interest in sustainable investments,” EY said in its report. The statement was included.

“India is now recognized as the world’s fourth-largest renewable energy market and attracted over US$4 billion in foreign direct investment last year alone… The presence of more than 60 key global investors, a strong track record of profitable exits and a progressive policy framework are accelerating the transition towards the next level of growth in renewable energy,” the report said.