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India Grid Trust (IndiGrid), an infrastructure investment trust (InvIT) will acquire five electricity transmission assets worth ₹11,500 crore ($1.66 billion) from Sterlite Power.
This comes after KKR and GIC recently announced fund infusion into IndiGrid. As a part of the deal, KKR and GIC have invested ₹1084 crore ($157 million) and ₹980 crore ($142 million), to collectively acquire 42 per cent of IndiGrid’s outstanding units.
India Grid Trust, backed by Sterlite Power Grid Ventures, was established in 2016 to own inter-State power transmission assets in India. Indi Grid will be issuing preference shares worth ₹2,514 crore to acquire the power transmission assets from Sterlite.
This marks KKR’s first infrastructure investment in Asia Pacific. With this deal, KKR has applied to become a sponsor of IndiGrid and plans to acquire an additional 15 per cent of IndiGrid’s total units from Sterlite Power. Post transaction closure, KKR and GIC will own around 57 per cent of IndiGrid’s outstanding units.
Harsh Shah, CEO, IndiGrid, said that with this new capital investment, IndiGrid will reach the goal of ₹17,000 crore of assets under management and plans to achieve ₹30,000 crore of Assets Under Management (AUM) by 2022.
In a separate transaction, KKR will acquire a majority shareholding in Sterlite Investment Managers Limited, the investment manager owned by Sterlite Power. However, Sterlite Power will remain a sponsor and Project Manager of IndiGrid.
Clean energy
Pratik Agarwal, Group CEO of Sterlite Power, said: “We believe now is the optimal time to invest in electricity transmission assets because the global clean energy revolution has created unprecedented demand for new transmission infrastructure.”
A share purchase agreement for the two operational transmission assets — NRSS XXIX and OGPTL — has been signed, while three additional assets will be purchased once they become operational.
The InvIT currently manages a portfolio of six electricity transmission assets with a total network of power transmission lines that span over 3,361 circuit kilometer across nine States. The purchase of Sterlite Power’s electricity transmission assets will significantly expand IndiGrid’s portfolio and enable it to address India’s infrastructure needs, said company officials.
“India holds a tremendous opportunity for infrastructure investment, in the trillions of dollars in the coming decades,” said Sanjay Nayar, Member and CEO of KKR India.
“We believe addressing the country’s infrastructure needs is a priority for the government, industries and communities across India,” he added. India’s energy demand is expected to reach 15,820 TWh by 2040, according to a YES Bank report.
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