The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Dec 24 (Reuters Breakingviews) - Dealmaking is coming for India’s renewable energy industry in 2025. More than a dozen generators of wind and solar power are looking for new owners as private equity-style firms like Brookfield Asset Management, as well as industry players like Siemens and Enel, look for an exit. Despite New Delhi’s target of renewables providing half the country’s electricity by 2030, success isn’t assured.

Hitting that goal will require around $200 billion of investment, analysts at Nomura reckon. But companies are getting finicky about deploying capital in a market where tariffs for solar power – the single largest subcategory – have moved in a narrow range since 2019.

Sellers may be overly optimistic on valuations, too. Investment fund owners like Brookfield, GIC and Macquarie spent much of 2024 scouting for and haggling with prospective buyers. India’s Inox Wind hinted on an earnings call in October that the Siemens Gamesa wind assets it took a look at were overpriced.

Some deals are set for completion after months of wrangling. A unit of Malaysia’s Petronas has agreed to buy part of Brookfield’s portfolio for $900 million, the Economic Times reported in November. Other potential buyers include JSW Energy’s JSWE.NS renewables unit and Singapore’s Sembcorp. Perhaps the biggest test will be what happens to GIC’s 50% stake in Greenko, which has 7.5 gigawatts of net installed capacity; Bloomberg reported in October that the Singapore sovereign wealth fund was considering selling part or all of its holdings.

Those who cannot secure an industry sale do have another option: an initial public offering. Public markets in India are now seen as mature enough to buy into companies in emerging sectors with earnings some way off. That’s a far cry from 2021 when ReNew Energy RNW.O, the country’s second-largest green power producer by capacity, went public on Nasdaq by merging with a blank-cheque company.

State-owned NTPC Green Energy’s NTPG.NS strong public market debut in late 2024 will buoy sentiment. A listing may work best for companies that have scaled up to a couple of gigawatts, such as Brookfield-backed CleanMax, and Hero Future Energies, whose sponsors include KKR KKR.N. It could be harder for firms with smaller amounts of installed capacity and less or no cash flow.

The coming shakeout in Indian renewables will reveal whose capital New Delhi might be able to rely on as its 2030 goal looms.

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This is a Reuters Breakingviews prediction for 2025. To read more of our predictions, click here.

(Editing by Antony Currie and Oliver Taslic)

((For previous columns by the author, Reuters customers can click on BOSE/shritama.bose@thomsonreuters.com))