Rajalakshmi Group acquires majority stake in Ashok Leyland's wind energy arm

Chennai-based Rajalakshmi group, which runs engineering and technology colleges, has acquired a majority stake in Ashok Leyland's renewable energy arm.

Speaking to Business Standard, Abhay S Meganathan, managing director, Rajalakshmi Automobiles, said the group has bought 75% stake in Ashok Leyland Wind Energy, which was previously owned by Ashok Leyland and Hinduja Foundries Ltd.

Last week, Ashok Leyland announced that it has diluted stake in Avia Ashok Leyland and Ashok Leyland Wind Energ. It, however, didn't disclose the name of the company that bought the stake.

While he declined to comment on the deal value, Meganathan said the enterprise value of Ashok Leyland Wind Energy is around Rs 170 crore. The balance stake will be held by the existing promoters for now, said Meganathan, adding that once the acquisition gets completed the company's name will be changed.

The group has lined up new projects worth around Rs 1,100 crore. It plans to add 137 MW of wind power, 53 MW of solar generation capacity and is also looking to operate and maintain (O&M) renewable energy projects.

Since this is a capital intensive sector, Meganathan said the group will rope in investors, including private equity and institutional investors, to fund future expansion.

“The group is receiving a lot of overtures from institutional investors for co-investing in the group’s wind and solar ventures. We will go with one or two of them,” Meganathan said.

The company already has 750 acres of land in Tamil Nadu and said it will look at Andhra Pradesh and Karnataka too.

The Tamil Nadu government is looking to strengthen electricity infrastructure and hence it is the right time to invest in renewable energy, Meganathan said. He added that the feed-in tariff of Rs 7.01 per kW offered by the state for solar projects is good and the group is working towards setting up solar projects in the state and expects to sign a PPA soon.

Ashok Leyland Limited