India Grid Trust (“IndiGrid”), India’s leading infrastructure investment trust, announced closure of the acquisition of two power transmission assets, NRSS XXIX Transmission Limited (“NTL”) and Odisha Generation Phase II Transmission Limited (“OGPTL”), from Sterlite Power for an enterprise value of ~INR 5,025 crore. IndiGrid had signed definitive documents to acquire the two assets in April 2019.
The acquisition has been funded through the preference unit issuance worth INR 2,514 crore, subscribed by KKR, GIC and other capital market investors in May 2019. The remaining amount has been funded through debt raise at IndiGrid and OGPTL. For this purpose, IndiGrid has issued INR 1,400 crores of AAA rated debentures and INR 200 crore worth AAA rated Market Linked Debentures, first of its kind issuance by an InvIT in India. A loan of INR 550 crores at OGPTL has also been extended by Axis Bank. Post-acquisition, IndiGrid’s net debt to AUM is below 49% and significantly lower than the permissible leverage cap of 70%, leaving significant debt headroom for future acquisitions.
Following the acquisition, IndiGrid’s AUM has increased from INR 5,220 crore to ~INR 10,660 crore. The InvIT currently manages a portfolio of eight power transmission assets with a total network of 18 power transmission lines that span more than 4,900 circuit kilometers across 11 Indian states. These acquisitions of assets will significantly expand IndiGrid’s portfolio and better enable it to deliver stable and growing yield.
Commenting on the acquisition, Harsh Shah, CEO of IndiGrid, said, “I am happy to share that we concluded these acquisitions within a short period of time from signing definitive agreements. With these acquisitions, IndiGrid’s AUM has increased close to three times from ~INR 3,800 crore to ~INR 10,660 crore in a span of two years since listing. With the recent capital raise anchored by KKR and GIC and the framework agreement with Sterlite Power, we will be able to reach INR 17,000 crore of assets under management and remain well on our way to achieving INR 30,000 crore of assets under management by 2022, while providing predictable and growing distributions to our investors.”