Azure Power Notches US$100 Million from Institutional Investor

Azure Power (NYSE:AZRE) announced on Wednesday (October 17) that La Caisse de dépôt et placement du Québec (CDPQ) has increased its interest in the company to 40 percent through a US$100-million contribution.

CDPQ, a long-term institutional investor, says the total amount it has invested into Azure now stands at US$240 million, including the latest contribution to the company’s capital rising. Created in 1965, CDPQ has an overall portfolio of C$308.3 billion in net assets with half them invested internationally, including in India, Brazil and US.

Azure Power, a solar power producer based in India, has portfolio in the country that spans more than 3,000 megawatts (MW) across 23 Indian states. The company signed additional contracts in September, which has led to this increase.

By early October, Azure announced the signing of 415 power purchase agreements for a selection of 11.2 MW rooftop solar projects the company obtained through auctions in September.

Emmanuel Jaclot, vice-president of infrastructure at CDPQ, said in Wednesday’s release that India is a priority market and that through this investment CDPQ is reaffirming its commitment to Azure Power.

“This transaction fits perfectly with CDPQ’s desire to contribute, as an investor, to a global low-carbon economy,” Jaclot said.

Of note, India is targeting to have 175 GW (100 GW of solar and 75 GW of wind) of renewable capacity in place by 2022.

Although several reports have indicated India might miss its projected deadline, some have suggested the country might meet the majority of its target.

A recent report by Wood Mackenzie states that India will meet 76 percent of the capacity, with the firm calling it a “noteworthy achievement.”

In August, Azure Power reported that over 300 MW of power under construction is expected to be commissioned by the first quarter of 2019. The company also noted that it has committed to 1,706 MW of projects that are set to be commissioned by 2020.

“CDPQ’s new investment enables our continued organic growth of highest quality solar power assets and our contribution towards realization of India’s Hon’ble Prime Minister’s commitment towards clean and green energy,” Inderpreet Wadhwa, CEO of Azure Power, said in Wednesday’s announcement. .

While India’s Foreign Direct Investment (FDI) policy varies across different sectors, the Indian government has a policy to encourage the transfer of foreign technologies in the renewable energy sector and permits 100-percent FDI under automatic route. 

Following the announcement, shares of Azure Power closed Wednesday’s trading session at US$12.01, down 0.08 percent over the one-day trading period.

The stock has a “sell” ranking on TradingView with 16 verticals against, eight neutral and two in favor. On TipRanks, the stock has an analyst target price of US$24 with a high estimate of US$26 and a low of US$22.

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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.