Post acquisition IndiGrid's AUM will increase by 40%
India Grid Trust has approved the acquisition of three power transmission assets (RAPP Transmission Company, Purulia & Kharagpur Transmission Company and Maheshwaram Transmission) from its sponsor Sterlite Power Grid Ventures at a value of Rs 1490 crore. These acquisitions result in a 40% increase in AUM, from Rs 3800 crore to Rs 5300 crore.The three assets consists of 5 transmission lines aggregating 1,425 ckms thus increasing its total portfolio to 13 transmission lines and 2 substations across 8 states.
These inter-state assets were awarded on perpetual basis on a Build, Own, Operate and Maintain model through competitive bidding. They have a long residual contractual life of about 34 years and are operating under the Point of Connection mechanism in India thereby significantly de-risking the revenues.
The proposed acquisition will be funded entirely through debt in order to utilize the available headroom. These assets have the same characteristics as the existing assets of IndiGrid which is AAA rated. This acquisition will increase IndiGrid's debt to assets ratio from 26% to nearly 49%.
The transaction is subject to customary regulatory and unitholders approvals and is expected to be completed in Q1 CY18.
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