Mahindra & Mahindra to take 26% stake in captive solar arm

Mahindra & Mahindra Limited (M&M) has approved the acquisition of a 26% equity stake in Neon Hybren Private Limited, a step-down subsidiary being set up to develop a 30 MWAC group captive solar power plant in Punjab, according to a disclosure filed with BSE and NSE on April 9, 2026.

The investment of up to Rs 11.17 crore will be made in one or more tranches through a Share Subscription and Shareholders Agreement (SSSHA) with Neon and its parent, Mahindra Susten Private Limited (MSPL). Following the transaction, MSPL’s shareholding will reduce from 100% to 74%. The deal is expected to close by December 31, 2026.

The ownership structure aligns with regulatory requirements under the Electricity Rules, 2005, which require a minimum 26% equity holding for a consumer to qualify under the group captive model. This enables M&M to procure power from the plant for its Punjab operations at lower cost compared to grid tariffs, while also meeting renewable purchase obligations (RPOs).

Neon Hybren, incorporated in May 2024, reported nil revenue and a net worth of about Rs 10.77 lakh as of March 2025, reflecting its pre-construction stage. The planned 30 MWAC grid-connected ground-mounted solar photovoltaic (PV) plant will supply power directly to M&M’s facilities in Punjab.

The transaction is classified as a related party transaction due to M&M’s position as the ultimate holding company of Neon through MSPL. The company stated that the deal will be executed on an arm’s length basis and does not require additional regulatory approvals.

The development reflects continued use of the group captive model by industrial consumers to secure long-term renewable power, particularly in states such as Punjab where tariff structures and open access frameworks support such arrangements.

The featured photograph is for representation only.