The unit holders of India Grid Trust (IndiGrid) have approved the induction of Esoteric II Pte. Limited, an affiliate of KKR, as a sponsor.

In a filing to exchanges, IndiGrid, which is India’s first power sector InvIT, said that in its AGM, held on September 28, shareholders gave their consent for KKR as a sponsor. Sterlite Power was the earlier sponsor. Sterlite Power will continue to remain as a shareholder of Sterlite Investment Managers (SIML), the investment manager of IndiGrid.

“By becoming a sponsor, KKR would be able to subscribe and invest a larger amount of capital in the InvIT,” said Harsh Shah, CEO of IndiGrid.

On September 9, KKR submitted a fresh letter of intent for its induction as a sponsor of IndiGrid. This came after the PE major withdrew its intent from becoming a designated sponsor following the termination of its agreement for a 15 per cent stake sale with Sterlite Power Grid Ventures (SPGVL), the original sponsor.

Also, as per InvIT regulations, 75 per cent of all unit holders needed to vote, which was met, the company said. Sanjay Nayar, CEO of KKR India, said: “Being named as an inducted sponsor of IndiGrid further reaffirms our steadfast commitment to support the Trust’s exciting journey and our priority in addressing India’s rapidly growing infrastructure needs.”

This is KKR’s first investment in the infrastructure segment in India and along with GIC they own 60 per cent in IndiGrid.

After the induction of the new sponsor, Shah indicated that its strategy of acquiring a combination of transmission and solar assets will continue going forward. “We decided in March that as a strategy, not more than 25 per cent of our assets will be operating solar projects which involve SECI and NTPC. The remaining 75 per cent will continue to be transmission assets,” said Shah.

One of the reasons for this diversification could be attributed to the increased mandate for using renewable energy going forward. “Solar generation efficiencies have become fairly predictable, which is a key and in most of the locations where we look to buy, we look at solar irradiation data, based on which the due diligence is carried out. This is our effort to manage risks arising out of these projects,” pointed out Shah.

In 2020, IndiGrid has acquired assets worth ₹2,500 crore. Additionally, IndiGrid has an exclusive framework agreement with Sterlite Power to acquire three projects worth ₹6,500 crore as and when they are commissioned. Of this, GPTL has been acquired by IndiGrid.

IndiGrid’s Assets Under management has increased more than three-fold from ₹3,800 crore in June 2017 to ₹13,600 crore in September 2020.

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