Thermax is exploring the entry of an external investor into its renewable energy subsidiary, First Energy Private Limited (FEPL), and is open to selling more than 51% of the business, according to a report by The Economic Times.
The Pune-headquartered engineering and capital goods company is working with advisers on a potential stake sale, with the transaction potentially valuing First Energy at around ₹3,000 crore, depending on the stake offered and the deal structure, The Economic Times reported, citing people familiar with the development.
The proposed investment could bring in a partner to help address operational challenges and improve the subsidiary’s execution capabilities. Thermax has not publicly confirmed the proposed transaction and declined to comment to the publication.
First Energy Has Around 800 MW of Renewable Capacity
First Energy has an installed renewable energy capacity of approximately 800 MW and a paid-up equity capital of around ₹646 crore, according to The Economic Times.
The company supplies renewable power solutions to commercial and industrial (C&I) customers through solar, wind, wind-solar hybrid and battery storage projects. Its offerings include captive and group captive power arrangements, open-access renewable electricity solutions, and operations and maintenance services.
First Energy also provides customised off-grid energy solutions for industrial customers seeking to transition towards renewable power.
Operational Challenges Prompt Search for Partner
The potential stake sale comes as First Energy works to address execution and operational difficulties that have affected its performance.
An executive cited by The Economic Times identified right-of-way issues and coordination with state governments as factors that had constrained the business. Bringing in an external partner could help Thermax strengthen project execution and improve operational delivery.
Thermax acknowledged the subsidiary’s difficulties in its FY2026 annual report, stating that it had continued to navigate operational complexities and execution challenges. The company said it was implementing corrective measures to strengthen execution and improve delivery timelines.
The proposed transaction could therefore serve both as a means of bringing in external capital and as an opportunity to secure a partner with the resources or capabilities to support the business’s operations and future development.
Thermax’s Ownership History
Thermax acquired a 33% stake in First Energy in 2015, with an arrangement to increase its holding to 100% over the following four years. First Energy was originally established in 2005 as BP Energy India, a wholly owned subsidiary of BP.
A sale of more than 51% would potentially transfer majority ownership to an incoming investor, although the final ownership structure would depend on the terms of any transaction.
The move reflects a broader financing approach in the renewable energy sector, where companies seek strategic or financial investors to support portfolio expansion, strengthen execution and share the capital requirements associated with project development.
Bioenergy Business Analysis
Thermax’s potential sale of a majority stake in First Energy highlights the role of partnerships in the development of India’s commercial and industrial renewable power market. With an installed portfolio of around 800 MW spanning solar, wind, hybrid power and battery storage, First Energy operates across several segments of the clean energy value chain. A new investor could potentially provide capital, operational expertise or additional development capabilities, depending on the structure of the deal.
However, the reported stake sale remains a potential transaction rather than a completed deal. Its eventual implications will depend on the investor selected, the ownership and governance arrangements, and First Energy’s ability to resolve project execution challenges and improve delivery performance. The reported valuation of around ₹3,000 crore should also be treated as indicative, as it may vary with the stake sold and final transaction terms.
