The Tata Group has decided to call off its nearly $2 billion deal with Malaysia's state-run Petroliam Nasional (Petronas) for investment in Tata Power's proposed renewable energy infrastructure investment trust (InvIT).

The decision to scrap the deal was conveyed last week, ending year-long negotiations. The two parties were in the final stages of talks over a binding term sheet. The conglomerate is mulling an initial public for the business.

Under the listing plans, Tata Power might create an umbrella entity that will contain its operational and pipeline IPP projects along with its microgrid, rooftop solar panels, and electric vehicle (EV) charging station operations.

Tata Power Renewable Energy (TPREL), a unit of Tata Power, had in 2020 initiated a strategic move to raise $500-750 million for its clean energy platform.