Infrastructure investment trust IndiGrid on Thursday said its investment manger's board has approved proposal to acquire Gurgaon Palwal Transmission, valued at Rs 1,080 crore, from Sterlite Power.
The Board of the Investment Manager of IndiGrid, India's first InvIT in the power sector, has approved the acquisition of Gurgaon Palwal Transmission Ltd (GPTL) from Sterlite Power at a value of up to Rs 1,080 crore (USD 140 million), an IndiGrid statement said.
According to the statement, the acquisition would increase the AUM (assets under management) of IndiGrid by 10 per cent to USD 1.75 billion.
IndiGrid's portfolio will increase to ten power transmission projects with a total network of 25 power transmission lines and 7 substations that span more than 6,080 circuit kilometres and 10,735 MVA across 15 states post this acquisition.
The GPTL is part of Inter State Transmission Scheme (ISTS) network and consists of three gas insulated substations (GIS) with a total transformation capacity of 3,000 MVA and 270 circuit kilometers of 400 KV transmission lines spread across Uttar Pradesh, Haryana and Rajasthan.
This project is a strategic asset for ensuring reliable power supply in the region which may reduce the carbon emissions by reducing dependence on DG (diesel generation) sets. The land requirement for this project is also substantially reduced with innovatively designed vertical GIS substation and monopole towers with micro-piling.
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IndiGrid had signed a framework agreement in April 2019 with Sterlite Power for acquisition of GPTL upon commissioning.
The acquisition, subject to unit holder's approval and other customary closing adjustments, will be funded through internal accruals, proceeds from the preference issue done in May 2019 and new debt.
It will be accretive to IndiGrid and will leave sufficient debt headroom, with net debt / AUM of approximately 53 per cent post acquisition.
With a visibility of Rs 18,000 (USD 2.5 billion) assets under management over the next 15-18 months, IndiGrid remains suitably placed to diversify into other similar infrastructure asset class and further increase the returns for its unit holders without diluting the risk profile, it said.
IndiGrid also looks to acquire solar projects with robust power purchase agreements, operational track record and financially strong counterparties / off-takers.
Commenting on the acquisition and the expansion strategy, Harsh Shah, Chief Executive Officer of IndiGrid, said in the statement, "GPTL acquisition is in line with our strategy for acquiring transmission projects to grow returns for unitholders. Over last 12 months, we have raised Rs 2,510 crore (USD 360 million) of capital via preference issue and acquired Rs 7,500 crore (USD 1 Billion) worth of transmission assets. It underlines our ability to grow our portfolio consistently and execute our strategy of enhancing investor returns while maintaining a strong balance sheet".
Earlier in the year, IndiGrid raised Rs 2,510 crore (USD 353 million) of capital by way of preferential issue which was subscribed by KKR and GIC amongst other marquee investors.
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