IndiGrid to buy 3 firms from Sterlite Power for ₹1,490 cr

Rajesh Kurup Mumbai | Updated on January 08, 2018 Published on October 08, 2017

Will raise the AUM of the firm by 40% to ₹5,300 crore

India Grid Trust (IndiGrid), an Infrastructure Investment Trust (InvIT), will acquire three power transmission assets worth ₹1,490 crore from its sponsor, Sterlite Power Grid Ventures Ltd (SPGV).

This will increase the InvIT’s total assets under management (AUM) by 40 per cent to ₹5,300 crore from the present ₹3,800 crore. The buys will also increase IndiGrid’s debt-to-assets ratio to nearly 49 per cent from the present 26 per cent.

“This is a significant step in increasing the InvIT’s total AUM to about ₹30,000 crore by 2022. Following the acquisitions, the unit-holders’ annualised return will increase by 4 per cent to ₹11.44 per unit from ₹11,” said Pratik Agarwal, Chief Executive Officer of IndiGrid.

The InvIT’s yield will increase to 12.1 per cent from 11.6 per cent. This is based on the InvIT’s closing price of ₹94.93 per unit as of Friday. The assets that are being acquired are RAPP Transmission Company, Purulia & Kharagpur Transmission Company and Maheshwaram Transmission.

These assets — spread across Rajasthan and Madhya Pradesh, Telangana, West Bengal and Jharkhand — consist of five transmission lines totalling 1,425 circuit kilometres. Following the acquisition, the InvIT’s total portfolio will rise to 13 transmission lines and two sub-stations across eight States, Agarwal added.

These inter-State assets were awarded on a ‘build, own, operate and maintain’ model through competitive bidding. They have a residual contractual life of about 34 years and are operating under the ‘point of connection’ mechanism in India, thereby significantly de-risking the revenues.

The acquisition of these assets, which have the same characteristics as existing IndiGrid assets, will be funded entirely through debt.

The transaction, which is subject to regulatory approvals, is expected to be completed by the first quarter of calendar year 2018.

“IndiGrid will continue to pursue such growth opportunities through acquisitions, including third-party assets. We are continuously on the lookout for further assets,” he added.

At present, IndiGrid owns 10 revenue-generating elements, including eight transmission lines of 1,936 circuit km and two substations of 6,000 MVA capacity.

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Published on October 08, 2017
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