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India Grid Trust (IndiGrid), an infrastructure investment trust (InvIT), has completed the acquisition of three power transmission assets worth ₹1,410 crore from its sponsor, Sterlite Power Grid Ventures Ltd (SPGV).
Simultaneously, it has also agreed to acquire a 46 per cent stake in a third-party asset owned by Techno Electric for ₹230 crore.
The total acquisition amount, including that in Patran Transmission Company Ltd (PTCL), the third-party asset owned by Techno Electric, stands at about ₹1,640 crore.
In October 2017, BusinessLine had reported that IndiGrid would buy three firms from Sterlite Power for ₹1,490 crore. “At the time of the IPO, we our Assets Under Management (AUM) stood at ₹3,700 crore, with an annualised Distribution Per Unit (DPU) of ₹11. Now, following these acquisitions our AUM would grow to ₹5,300 crore and DPU to ₹12 and the internal rate of return (IRR) has grown to 11 per cent from under 9 per cent before IPO,” said Pratik Agarwal, Chief Executive Officer, IndiGrid.
All these assets would be bought into IndiGrid, he said.
InvITs, much like mutual funds, enable individuals to pool investments into the infrastructure sector and earn a return on the income (after deducting expenditure).
InvITs can invest in infrastructure projects, either directly or through SPVs, while in case of public-private partnership projects, such investments can be made only through SPVs. In India, InvITs are regulated by SEBI and are mandated to be listed.
The trust has completed the acquisition of RAPP Transmission Company Ltd, Purulia, Kharagpur Transmission Company Ltd and Maheshwaram Transmission Ltd from SPGV.
“We intend to reach an AUM of ₹30,000 in the next 2-3 years, and two-thirds of this will come from internal transfers and one-third from third party,” he said, adding all these inter-State assets were awarded on a ‘build, own, operate and maintain’ model and have a residual contractual life of about 34 years.
These assets — spread across Rajasthan and Madhya Pradesh, Telangana and Andhra Pradesh, West Bengal and Jharkhand and Punjab — consist of totalling 1,400 circuit kilometres (ckm).
These acquisitions will increase the total ckm to 1,900 to 3,300, while the InvIT’s total portfolio will rise to 13 transmission lines and three sub-stations across nine States.
“The fundamentals of the power transmission sector in India remain robust and IndiGrid will continue to acquire assets from both the sponsor and third parties to further increase portfolio IRR,” he added.
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