On May 7, 2024, the CCI approved the transaction by Greenko Energies Private Limited (‘Greenko Energy/Acquirer’) for the purchase of additional equity shares in Sikkim Urja Limited (‘Sikkim Urja/Target’) (the Acquirer and the Target are collectively referred to as the ‘Parties’). ^[1]

Description of Transaction and Parties

On April 5, 2024, a Notice was filed by the Acquirer before the CCI pursuant to a tripartite agreement dated February 3, 2024, and a share purchase agreement dated February 28, 2024, between the Government of Sikkim (‘GoS’), Sikkim Power Investment Corporation Limited (‘SPICL’) and the Acquirer.

The combination involves:

i.     Purchase of the entire 60.08% equity stake in Sikkim Urja by Greenko Energy from SPICL, a public undertaking of the GoS (‘SPICL Transaction’); and

ii.    Purchase of the entire 5.62% equity stake in Sikkim Urja by Greenko Energy from PTC India Limited (‘PTC’) (collectively referred to as the ‘Proposed Combination’).

Acquirer: Greenko Energy is part of the Greenko Group, indirectly held by Greenko Energy Holdings, which is managed by GIC Special Investments Private Limited (‘GIC’), Abu Dhabi Investment Authority Group (‘ADIA Group’), ORIX Corporation (‘ORIX Group’), and GVL Group.

Target: Sikkim Urja is a special purpose vehicle for the 1200 MW hydropower project in North Sikkim, Sikkim. Sikkim Power Transmission Limited (‘SPTL’) is a subsidiary of Sikkim Urja, in a joint venture with Power Grid Corporation of India Limited, managing a 400 kV transmission line.

Overlaps and Assessment by CCI

Sikkim Urja is involved in power generation and transmission, with a specific focus on hydropower generation.

Horizontal Overlaps: The CCI observed horizontal overlaps in the broad power generation segment and renewable energy and hydropower sub-segments between Sikkim Urja/SPTL and entities within the: (i) Greenko Group; (ii) GIC; (iii) ADIA Group; (iv) ORIX Group; and (v) GVL Group.

Vertical Overlaps: The CCI observed vertical overlaps between the activities of power generation and transmission.

Assessment: The CCI noted that Sikkim Urja’s 1200 MW power generating capacity is less than 1% of India’s overall power generation and renewable power generation capacities, and less than 3% of hydropower generation capacity.

Given the insignificant market presence of Sikkim Urja, its current non-operational status due to flood damage, and Greenko Group’s existing shareholding, the CCI determined that the Proposed Combination would not significantly impact competition in the power generation sector.

The CCI concluded that the Proposed Combination is unlikely to result in an appreciable adverse effect on competition in India. Therefore, in the absence of any competition concerns, the CCI approved the Proposed Combination.

[1] Greenko Energies Private Limited/Sikkim Urja Limited (Combination Registration No. C-2024/04/1131).