India's green energy sector is witnessing a surge of mega-deals, with global investors lining up to back ambitious projects. In one of the largest potential transactions, US-based alternative investment firm Stonepeak is circling a significant stake in AM Green, the holding company of Greenko Group founders, in a deal that could be worth around $1.4 billion in equity value.
The Mega-Deal: Stonepeak and Mitsui's Strategic Moves
According to sources familiar with the development, Stonepeak is seeking to acquire up to a 15% stake in AM Green (Luxembourg) S.à r.l. The firm is currently conducting due diligence, and the transaction is expected to conclude within a month. This investment would position the deal among India's largest green energy financings.
Simultaneously, Japan's trading giant Mitsui & Co. is also performing due diligence for a potential stake at the holding company level. Mitsui has already signed a Memorandum of Understanding (MoU) with AM Green for strategic collaboration on energy transition initiatives. A joint statement from December indicated the parties would assess potential investment in AM Green Metals' value chain.
"The proposed Stonepeak deal has the same terms as those offered to Mitsui," one of the sources revealed, highlighting the competitive interest in the asset.
Capital Allocation and Expansive Capex Plans
The capital infusion from these deals will serve dual purposes for AM Green, which is owned by founders Anil Chalamalasetty and Mahesh Kolli. A portion of the funds, specifically $650 million, will be used to repay private credit that was originally borrowed to acquire a 17.5% stake in Greenko Energy Holdings from Japan's Orix Corp.
The remaining capital will be channeled into AM Green's expansive $20-billion capital expenditure strategy. This includes major projects in biofuels, green aluminium, and green ammonia. The company's subsidiary, AM Green Aluminium Metals and Materials, is building a 1 million tonnes per annum (mtpa) primary aluminium smelter alongside 2 mtpa of alumina refining. This move is strategically timed as developed economies impose carbon taxes on imports.
Furthermore, AM Green is establishing production facilities for a suite of green molecules, including green hydrogen, green ammonia, biofuels, e-methanol, and sustainable aviation fuels, targeting decarbonization in hard-to-abate industries.
India's Green Energy Landscape Heats Up
This potential investment by Stonepeak and Mitsui is not an isolated event but part of a broader wave of global capital flowing into India's energy transition space. Stonepeak itself is not new to the market, having previously bid for other Indian renewable platforms.
AM Green has already attracted significant attention and partnerships. Earlier, Malaysia's Gentari and Singapore's GIC planned a $1.75 billion investment in AM Green Ammonia. The company has also partnered with global mining major Rio Tinto for a $6 billion renewable-powered aluminium facility and with Germany's RWE for green ammonia supply.
On the ground, AM Green's first 1 mtpa green ammonia project in Kakinada is expected to be commissioned in 2026, costing about Rs 12,500 crore. The company has already secured offtake agreements with major global players like Uniper, Yara, and Keppel.
Despite challenges like power purchase agreement delays and grid curtailment in states like Rajasthan and Gujarat, investor confidence remains high. A United Nations report noted that in 2024, India grew its renewable energy capacity at more than three times the rate of its electricity demand growth, leading to a decline in coal and gas use. Over 83% of power sector investment went to clean energy, with Q4 2024 seeing a dramatic 91.5% year-on-year increase in renewable energy investments, totaling over $4.66 billion.
As global giants like Stonepeak and Mitsui conduct their due diligence, the proposed mega-deal underscores India's pivotal and rapidly scaling role in the global green energy transition, attracting capital for its most ambitious industrial decarbonization projects.
