IndiGrid has entered into a share purchase agreement to buy out power transmission line operator Jhajjar KT Transco Private Limited for Rs 310 crore.

Jhajjar KT Transco is owned by Kalpataru Power Transmission Ltd and Techno Electric & Engineering Company (TEECL).

The acquisition is subject tocertain adjustments on account of assets and liabilities at the time of closing of the transaction, IndiGrid said in a statement.

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.

Jhajjar KT Transco, consists of three 400 KV transmission lines spread across 103 kms in Haryana, with 2 substations having a transformation capacity of 830 MVA. The project is an operational intra state asset awarded on a Design Build Finance Operate and Transfer (DBFOT) basis, with a contractual period of 25 years and comes with a provision of another 10-year extension. It has been operational for 8 years and is a strategic asset for Haryana state distribution companies and the key evacuation transmission system from the 1,320 MW thermal power plant in Jhajjar.

Harsh Shah, Chief Executive Officer of IndiGrid, said: “This acquisition is in line with our strategy to acquire accretive operational assets with long term and stable cash flows thereby growing returns for unit holders.

This acquisition of Jhajjar KT Transco follows a couple of acquisitions done by IndiGrid in FY 20. completed the acquisition of East North Interconnection Company Limited Transmission Company Limited (ENICL) from Sterlite Power for $134 million and is a part of inter-state power transmission assets network, consisting of two 400 KV transmission lines with a total 900 circuit kilometers across Assam, Bihar and West Bengal. This was followed by acquisition of Gurgaon Palwal Transmission Limited (GPTL) for Rs 1,080 crore, which has presence in Uttar Pradesh, Haryana and Rajasthan.

The Jhajjar KT Transco acquisition will boost IndiGrid’s Assets Under Management (AUM) to Rs 12,300 crore.

This transaction with KPTL and TEECL also reinforces the opportunity to grow the IndiGrid portfolio through value accretive acquisitions of quality transmission assets, stated Shah. This is also the second transaction with TEECL. In August 2018, IndiGrid had acquired Patran Transmission Company Limited (PTCL) from TEECL.

The acquisition expected to be completed in the next couple of months and is subject to customary closing adjustments and regulatory approvals, the company said. It will be funded through a combination of debt and internal accruals. With this acquisition, IndiGrid’s portfolio will increase to 10 power transmission projects with a total network of 23 power transmission lines covering 6,000 circuit kilometers across 14 states.

Apart from third party opportunities available in the Indian transmission sector IndiGrid has another Rs 6,500 crore pipeline of transmission projects under the framework agreement with Sterlite Power providing visibility of Rs 18,000 crore of AUM over next two years. JM Financial Limited acted as financial advisor and Cyril Amarchand and Mangaldas as legal advisors to IndiGrid for this transaction.

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