Canada Pension Plan Investment Board — Combination C-2022/06/936

Non-Confidential Version COMPETITION COMMISSION OF INDIA 15th July 2022 Notice under Section 6 (2) of the Competition Act, 2002 given by Canada Pension Plan Investment Board CORAM: Mr. Ashok Kumar Gupta Chairperson Ms. Sangeeta Verma Member Mr. Bhagwant Singh Bishnoi Member Order under Section 31(1) of the Competition Act, 2002 1. On 6th June 2022, the Competition Commission of India (Commission) received a notice (Notice) under Section 6(2) of the Competition Act, 2002 (Act), given by the Canada Pension Plan Investment Board (CPPIB). The Notice was given pursuant to the Announcement of Buyback by ReNew Energy Global plc (ReNew) on 2nd February 2022; order dated 8th February 2022 of the High Court of Justice of England and Wales (Chancery Division) granting application of ReNew for cancellation of share premium of ReNew (HCJ Order); and Certificate of Registration issued by the Companies House of the United Kingdom on 14th February 2022 for registration of HCJ Order. 2. The Commission, vide its communication dated 24th June 2022 issued under Regulation 14(3) of the Competition Commission of India (Procedure in regard to transaction of business relating to combinations) Regulations, 2011 (Combination Regulations), required the notifying party to remove defects in the Notice and furnish certain information relevant for the purpose of assessment of the Proposed Combination. The notifying party submitted its submissions vide response dated 5th July 2022.

3. The Proposed Combination envisages an increase in the voting right percentage of CPPIB in ReNew pursuant to a buyback program announced by ReNew. ReNew announced a share repurchase program to buy back its Class A Ordinary Shares (i.e., shares carrying voting rights) by way of open market purchase (Buyback). Under the Buyback, certain

Class A Ordinary Shares, up to USD 250 million, may be repurchased from the open market and subsequently cancelled. Prior to the Buyback, CPPIB holds % voting right in ReNew. CPPIB will not participate in the Buyback in any capacity. As a result of the Buyback, the aggregate number of voting shares of ReNew is expected to decrease, which may lead to an increase in the proportion of voting rights held by CPPIB in ReNew beyond 25%. CPPIB is likely to hold voting rights in the range of 25% to 30% post completion of the Buyback.

4. It has also been submitted that, according to Item 6 of Schedule I read with Regulation 4 of the Combination Regulations, buyback of shares ordinarily does not require notification to the Commission unless it leads to an acquisition of control. The Proposed Combination could have merited the said exemption. However, the Commission has previously noted that an acquisition of shares or voting rights in excess of 25% in an entity confers joint control on the acquirer, as it is able to block any special resolutions of such entity. The Proposed Combination may lead to CPPIB holding voting rights in excess of the 25% threshold. Therefore, out of abundant caution and bearing in mind the Commission’s decisional practice, CPPIB has notified the Buyback to the Commission.

5. It is observed that acquisition of voting rights is one of the forms of combination under Section 5 of the Act. Acquisition of voting rights would require notice to the Commission under Section 6(2) of the Act if the parties to the transaction meet the financial thresholds specified in Section 5 of the Act, unless the notification requirement is dispensed with pursuant to the Combination Regulations or the notification issued under Section 54 of the Act. In relation to a buyback, Item 6 of Schedule I read with Regulation 4 of the Combination Regulations provides that notice under Section 6(2) of the Act need not be normally filed for an acquisition of shares or voting rights pursuant to buyback of shares that is not leading to acquisition of control. In the instant matter, prior to the Proposed Combination, CPPIB holds less than 25% voting rights in ReNew. However, upon consummation of the Buyback, voting rights of CPPIB in ReNew is likely to exceed 25%. As CPPIB would acquire the ability to block any special resolution in ReNew, CPPIB would acquire negative control on special resolutions in ReNew. Thus, the Proposed Combination would not be eligible for the benefit of Item 6 of Schedule I of the Combination Regulations. Therefore, the contention of CPPIB, that filing of the notice is out of abundant caution, is not sustainable.

6. CPPIB has submitted that it is a professional investment management organization that invests the funds transferred to it by the Canada Pension Plan Fund that are not needed to pay current benefits on behalf of contributors and beneficiaries. It has been submitted that, aside from its shareholding in ReNew, CPPIB has a stake in companies having presence in India which are engaged in the generation of power through solar energy or transmission of power (Other Portfolio Companies). Further, portfolio company(ies) of CPPIB also procures power from subsidiary(ies) of ReNew.

7. ReNew, along with its subsidiaries and joint ventures, is engaged in the business of generating electricity through non-conventional and renewable energy sources. ReNew also provides certain ancillary/incidental services such as EPC services, intelligent energy solutions (Peak Power, Round-the-Clock, storage services) and energy (including related assets) management services for public utilities, commercial and industrial customers.

8. Given that the Other Portfolio Companies of CPPIB have limited presence in the power generation business and its sub-segment, the horizontal overlap between activities of ReNew and Other Portfolio Companies of CPPIB is not likely to raise competition concerns.

9. Further, Other Portfolio Companies of CPPIB also exhibit vertical interface with the activities of ReNew. CPPIB has a stake in L&T Infrastructure Development Projects Limited (L&T IDPL). L&T IDPL operates a 980 circuit km power transmission line in the State of Karnataka through its subsidiary, Kudgi Transmission Limited (KTL). It has been submitted that the KTL transmission line has been developed pursuant to an RFP by REC Transmission Projects Company Limited for evacuation of power from the Kudgi Thermal Power Plant (Kudgi TPP) of NTPC Limited (NTPC). Pursuant thereto, KTL has entered into a transmission service agreement, wherein it will provide transmission services to Kudgi TPP for a concession period of 35 years. It has been submitted that the transmission lines of KTL do not have any existing supply arrangements or bear any commercial linkage with the assets of ReNew. With regard to the procurement of power by portfolio company(ies) of CPPIB from ReNew, it is observed that the volume of power procurement is not significant to raise any competition concern.

10. Considering the facts on record, including details provided in the Notice given under Section 6(2) of the Act and assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India in any of the relevant market(s), and therefore, the Commission hereby approves the same under Section 31(1) of the Act.

11. This order may be revoked if, at any time, the information provided by the notifying party is found to be incorrect.

12. The information provided by the notifying party is confidential at this stage in terms of and subject to the provisions of Section 57 of the Act.

13. The Secretary is directed to communicate to the notifying party accordingly.