Sterlite Power’s infra investment trust eyeing third-party transmission assets

ksenia kondratieva Mumbai | Updated on October 19, 2018 Published on October 19, 2018

Achieving 24x7 power for all depends on the creation of a robust cost-effective transmission network.   -  S Thanthoni

The InvIT platform may look to buy assets of L&T, Essar Power, say industry experts

India Grid Trust (IndiGrid), the infrastructure investment trust (InvIT) promoted by one of the largest players in India’s power transmission sector, Sterlite Power, is scouting for power transmission assets available in the market for sale as it aims to grow its portfolio, Harsh Shah, CEO of India Grid Trust told BusinessLine.

“We keep looking at third-party assets from the market as well as from Sterlite Power as it has two or three operational projects for which we have the right of first offer,” he said.

Earlier this year, IndiGrid had signed a deal with Techno Electric & Engineering Company for acquisition of a 46 per cent stake in Patran Transmission for ₹232 crore. The deal marked a first third-party acquisition done by an InvIT in the country.

Industry experts note that there is a bunch of transmission assets that IndiGrid could look at, including assets of L&T, Essar Power, Megha Engineering & Infrastructure (MEIL) and debt-ridden Jaiprakash Power Ventures.

IndiGrid was also considering Essel Infrastructure’s transmission assets, according to industry sources. However, the ₹6,000-crore deal eventually went to Edelweiss-backed fund, Essel Infra announced earlier this week.

Going forward, Shah added, IndiGrid will also be looking at acquiring another two of Sterlite Power’s projects, East North Interconnection (ENICL), set up to evacuate power from the North-East and eastern States to the northern region of India and NRSS XXIX Transmission Ltd (NTL) in Jammu & Kashmir. Both projects are fully completed and commissioned.

Odisha Generation Phase Transmission Ltd (OGPTL) operating a project for constructing two lines connecting Odisha and Chhattisgarh is expected to be commissioned in December this year, according to Shah.

Another partly completed asset is Khargone Transmission Project connecting NTPC’s 1,320-MW thermal power project at Khandwa in Madhya Pradesh with the transmission system to cater to Maharashtra and southern states. These assets could be acquired by IndiGrid one year after revenue generation starts.

“We are looking to acquire these assets any time during 2018-2019.

“We have got approval from investors to raise capital of up to ₹3,000 crore at the last AGM. How much we will raise will depend on the specifics as we go ahead,” Shah said.

Better than G-Secs

The stocks of IndiGrid, as well as another listed InvIT – IRB Infrastructure’s IRB InvIT – have been trading below listing prices since their IPO. However, according to Shah, IndiGrid’s volatility has been substantially lesser than government bonds as well as stocks, especially infrastructure and capital goods stocks. “If you look at total return – money we have distributed now plus the change in prices, we are better by 6 per cent than G-Sec bonds,” Shah said.

IndiGrid has clocked a consolidated revenue of ₹165 crore in the quarter ended September, 30. On a half-yearly basis, as IndiGrid makes bi-annual distributions, the revenue and EBITDA stood at ₹325 crore and ₹297 crore, respectively, for the first half of FY19.

The board of Sterlite Investment Managers, an investment manager of IndiGrid, has on Thursday approved distribution per unit of ₹3 for Q2 FY19. Of this, ₹2.72 will be distributed as interest, and remaining as capital repayment, the company said.

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Published on October 19, 2018
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