KKR may invest $400 million in Hero Future Energies

26 Aug 2022 , 08:12 AM

In what would be the US private equity manager’s single largest check in the Indian clean energy industry thus far, KKR Co. is in advanced talks to invest about $400 million in Hero Group’s renewable energy company Hero Future Energies (HFE), according to news reports.

Before an official announcement, which is anticipated in a few weeks, the last rounds of discussions are still being held. In exchange for sizeable minority ownership and significant governance rights, KKR will become a co-promoter of the company alongside founder Rahul Munjal, chairman, and managing director.

The money will mostly be used to eliminate debt and expand the company. The transaction’s advisor is JP Morgan.

In addition to the Hero Group, the International Finance Corporation (IFC) and Masdar, also known as Abu Dhabi Future Energy Co., are investors in the business. Masdar purchased a 20% stake in the business in November 2019 for $150 million, valuing the New Delhi-based business at $750 million. The valuation for the KKR round is anticipated to surpass $1 billion.

Early this year, the business teamed up with Ohmium International, a US-based company, to build 1 GW of green hydrogen production facilities in Europe, the UK, and India. The Kerala State Electricity Board awarded the business a contract last month to build a 10 MW grid-connected energy storage plant in Kerala.

As of December 31, 2021, the operational portfolio includes solar capacity of over 950 MW in Madhya Pradesh, Telangana, Andhra Pradesh, Karnataka, and Rajasthan as well as wind capacity of over 580 MW in Rajasthan, Maharashtra, Tamil Nadu, Karnataka, and Madhya Pradesh.

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