Thermax is seeking an external investor for its renewable energy subsidiary First Energy and is open to offering more than a 51 per cent stake in the business, according to people aware of the development. The Pune-headquartered engineering and capital goods company is working with advisers on a potential stake sale.

The enterprise value of First Energy could be about Rs. 30 bn, depending on the stake sold and the transaction structure. First Energy has an installed renewable energy capacity of about 800 MW and paid-up equity capital of approximately Rs. 6.46 bn.

The business has faced operational and execution challenges that have affected its performance. These include right-of-way issues and coordination with various state governments, while Thermax has acknowledged in its FY26 annual report that First Energy did not perform as planned and said corrective measures were being implemented to improve execution and delivery timelines.

Thermax is seeking a partner to help manage the business, address operational constraints and support the expansion of its renewable portfolio. Thermax declined to comment on the potential transaction.

First Energy provides renewable power solutions to commercial and industrial customers across solar, wind, wind-solar hybrid and battery storage projects. Its offerings include captive and group captive projects, open-access renewable power solutions, and operations and maintenance services across states under capital expenditure and operating expenditure models. The company also develops customised off-grid solutions for industrial customers transitioning to renewable energy.

Thermax acquired a 33 per cent stake in First Energy in 2015 and had an arrangement to increase its holding to 100 per cent over the following four years. First Energy was launched in 2005 as BP Energy India, a wholly owned subsidiary of BP. The proposed stake sale comes as renewable energy companies seek strategic and financial investors to fund capacity expansion and strengthen execution capabilities.