According to Debasish Purohit, co-head of investment banking for Bank of America in India, the Indian green energy sector is poised to attract investments of up to $800 billion over the next decade.
In an interview, Purohit stated that the energy transition theme is expected to drive significant investments from Indian corporates, foreign strategic investors, and sponsors across various segments, including green hydrogen, energy storage, and component manufacturing. Given its scale, India is seen as a natural destination for strategic investors aiming to achieve net-zero targets.
Bank of America predicts that the renewable energy sector will receive approximately $250 billion in investments over the next ten years. Batteries are expected to attract around $250 million, while grid infrastructure and other segments such as green hydrogen, equipment, and systems may secure a total investment of $300 billion.
The shift towards green energy has gained traction among Indian corporations, with many announcing ambitious plans in this field. Reliance Industries, for example, has set a target to become carbon-neutral by 2035. The company has made significant acquisitions, investing over $1.5 billion to expand its capacity in solar, battery, and hydrogen technologies to offset emissions from its oil and petrochemicals business. Additionally, Reliance Industries has been actively involved in manufacturing polysilicon, wafers, cells, modules, electric vehicles, grid storage batteries, electrolyzers, and fuel cells.
Other conglomerates such as the Adani Group and the Tatas have also outlined substantial investments in green energy. The Indian market has been a hotspot for renewable mergers and acquisitions, with Bank of America claiming over 70% market share in this area over the past five years.
Bank of America has been advising on various green energy and renewables deals, totaling over $5 billion. Notable examples include advising Actis LLP on the $1.6 billion sale of Sprng Energy to Shell and assisting TPG Rise in its $1 billion investment in Tata Motors’ electric vehicle business. Several large conglomerates, including the Tata Group, Mahindra Group, and the TVS Group, have recently sought capital for their electric vehicle businesses.
Purohit also noted increased activity in block deals and the primary IPO market across different sectors. Bank of America advised Tencent on a block trade in Policybazaar and managed other block deals, including in Zomato Ltd. However, Purohit mentioned a valuation reset in the consumer technology segment, with new private raisings limited to top-quartile companies and transaction sizes in listed space shrinking.
The potential impact of the $800 billion investment in India’s green energy sector is immense. It will drive the country’s transition towards a more sustainable and clean energy future, helping to reduce carbon emissions and dependence on fossil fuels. The investments will facilitate the development of renewable energy projects, energy storage solutions, green hydrogen infrastructure, and the manufacturing of components, contributing to job creation and economic growth. However, challenges such as policy implementation, regulatory frameworks, and the integration of renewable energy into the existing grid infrastructure will need to be addressed for the sector to realize its full potential.
