India Grid Trust signed a share purchase agreement to acquire NER-II Transmission from Sterlite Power as part of the framework agreement.
India Grid Trust's indicative value of the acquisition is Rs 4,625 crore and will boost India Grid Trust's AUM by 34% to over Rs 20,000 crore. Post completion, the platform's asset portfolio would consist of 13 power transmission projects, with a total network of 38 power transmission lines and 11 substations extending about 7,570 circuit kilometers and 13,350 MVA in 17 Indian states and 1 Union Territory.
NER-II is part of Inter State Transmission Scheme (ISTS) network, and was awarded on a Build, Own, Operate, Maintain (BOOM) basis with a contractual period of 35 years. The project has 11 elements including two substations of 1,260 MVA capacity and four transmission lines extending over 830 circuit kilometers. The asset spans across Assam, Arunachal Pradesh and Tripura and is of strategic importance for the delivery of power in one of the toughest regions in the country. This project will strengthen the power transmission network in the North Eastern States and address the of transmission, sub-transmission, and distribution system needs of the region.
IndiGrid had signed a framework agreement in April 2019 with Sterlite Power for acquisition of NER-II upon commissioning. This transaction is expected to be consummated during Q4 FY21, subject to unitholders' approval, regulatory approvals, and other customary closing adjustments. The acquisition will be funded through a combination of internal accruals, debt, equity proceeds from the preference issue done in May 2019 and forthcoming rights issue. Post this acquisition, the net debt/AUM would stand at 64%.
Shares of India Grid Trust fell 0.23% to Rs 129.70 on BSE. The scrip hit an intraday high and low of Rs 138.40 and Rs 129.52, respectively.
On the technical front, the stock's RSI (relative strength index) stood at 46.170. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.
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The stock was trading between its 50-day moving average (DMA) placed at 131 and its 200-day moving average (DMA) placed at 111.89.
IndiGrid is the first Infrastructure Investment Trust (InvIT) in the Indian power sector. It owns 12 operating projects consisting of 34 transmission lines with more than 6,740 ckms length and 9 substations with 12,290 MVA transformation capacity. IndiGrid has assets under management (AUM) worth about Rs 15000 ($2.1 bln). The investment manager of IndiGrid is majority owned by KKR.
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