IndiGrid InvIT expects to continue growth trajectory in FY21

Venkatesh Ganesh Mumbai | Updated on May 27, 2020

IndiGrid Infrastructure Investment Trust (InvIT), focussed on the power sector, has maintained a positive outlook, and expects to continue its growth trajectory in FY21.

IndiGrid InvIT is backed by Sterlite Power Grid Ventures, which is majority owned by KKR and was established in 2016 to own inter-State power transmission assets in India. “The slew of measures taken by the government such as liquidity infusion of ₹90,000 crore into discoms (electricity distribution companies), coupled with stable power demand, despite industries and establishments working in reduced capacities (during Covid-19), makes us positive for the 2021 fiscal,” said Harsh Shah, CEO, IndiGrid.

IndiGrid is also looking to buy solar assets, in an attempt to have a varied asset pool, but Shah maintained that solar will not be more than 20 per cent of its overall assets under management (AUM). Currently, the InvIT owns nine operating projects consisting of 20 transmission lines, and has an AUM of $1.6 billion.

“Our focus would be on portfolio growth, robust asset management, sustainability and maintaining adequate liquidity to mitigate current uncertainties as well as strengthening balance sheet,” he added.

The regulatory environment for InvITs has been quite conducive with a proactive stance from regulators such as SEBI, which enabled greater retail participation via reduction in lot size, enabled capital raising via higher leverage, preferential allotment and rights issue guidelines, Shah said.

Last year, SEBI reduced the lot size from 5 lakhs to 1 lakh, with an aim to increase retail participation in InvITs.

Further, the RBI has also enabled banks to lend to InvITs, thereby enabling InvIT platforms to become more competitive and get established as a credible source of infrastructure financing.

This is the third year since IndiGrid got listed and Shah termed this as a “transformational” year for the company. In 2019-20, IndiGrid acquired assets worth ₹6,200 crore, which led to a more than two-fold jump in distributable cashflows to ₹720 crore for the current financial year. This was possible on back of a preferential allotment of ₹2,510 crore by long-term investors including KKR, GIC and other capital market investors.

After three years of operation, IndiGrid has grown its AUM more than threefold, from ₹3,700 crore to ₹12,000 crore. “We remain committed to delivering on our promise of ₹30,000-crore AUM over the next two years as we acquire projects,” Shah states. Currently, the trust has a debt of ₹6,400 crore.

IndiGrid reported a consolidated revenue of ₹328 crore for the March-ended quarter, up 92 per cent when compared on a yearly basis when it posted ₹170.5 crore. Consolidated EBITDA for the quarter was ₹299.3 crore, up 98 per cent y-o-y when comapred with the ₹150.8 crore posted in the year-ago period.

The Board of the Investment Manager of IndiGrid approved a distribution per unit (DPU) of ₹3 for Q4 FY20 entirely payable as interest to unit holders. With this, the InvIT has delivered on its DPU guidance of ₹12 per unit for FY20. Including this 12th distribution, IndiGrid has distributed ₹33.56 per unit, a return of 32 per cent since listing.

Published on May 27, 2020

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