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L&T infrastructure arm looking to acquire power transmission assets

ksenia kondratieva Mumbai | Updated on June 11, 2018

The company currently operates the Kudgi Power Transmission Line project in Karnataka   -  AFP

Raises over ₹3,000 crthru pvt placement

L&T Infrastructure Development Projects Limited (L&T IDPL), a subsidiary of infrastructure major Larsen & Toubro (L&T), is looking at expanding its power transmission portfolio by bidding for new projects and acquiring brownfield assets.

“We are currently looking to expand our power transmission portfolio, so we will be happy to lok at purchasing power transmission acquiring assets, including those of PowerGrid corportaion,” Shailesh Pathak, CEO of L&T IDPL said.

The company currently operates the Kudgi Power Transmission Line project in Karnataka and has been recently prequalified for projects tendered by Jharkand under Tariff Based Competitive Bidding (TBCB) route, Pathak added.

Funds raising

L&T IDPL last month raised over ₹3,000 crore through private placement of its infrastructure investment trust IndInfravit Trust where Canada Pension Plan Investment Board (CPPIB) and Allianz Capital Partners (ACP) has acted anchor investors. CPPIV had acquired 30 per cent of IndInfravit units for around ₹2,045 crore and ACP has acquired 25 per cent for ₹ 925 crore. L&T IDPL will hold 15 per cent of the InvIT units.

Canada Pension Plan Investment Board (CPPIB) has made investment of ₹2,000 crore in L&T IDPL in 2014.

IndInfravit Trust acquired five operational toll roads of its sponsor, IDPL, which prior to the transaction had 16 road assets in total, out of which two are annuity projects and 14 are toll projects.

“We have to look for further monetization as time passes. We have just completed two highways , one in Orissa and one in Telangana, the moment two years cash flow behaviour passes, we could put these two projects into the InvIT,” Pathak said.

He added that in the road space, the company will continue exploring all existing opportunities -- from pure BOT (build-operate-transfer) to HAM (hybrid annuity model) and brownfield project. It will also look at participating in the next rounds of government tenders for operational national highways through the toll-operate-transfer (ToT) model.

Eye on margins

“We will be interested in everything provided it makes us money,” Pathak said adding that IDPL is not likely to bid aggressively as the era of “suicidal” bidding for road projects that used to happen in case of BOT tenders floated earlier is over.

“Witht the IBC it is very diofficult to folow the earlier strategy of bidding to win at suicidal rates and then try to renegotiate, iu think that busioness model is over,” he noted.

Published on June 11, 2018

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