·IndiGrid’s AUM increases by ~9% to ~INR 133 Bn (USD 1.80 Bn)
·GPTL consists of 3 GIS of 3,000 MVA capacity and ~270 ckms of 400 KV transmission lines
·Acquisition adds ~INR 350-400 Mn of net distributable cash flow per year
Mumbai, NFAPost: India Grid Trust (“IndiGrid”), India’s leading infrastructure investment trust, completed acquisition of another transmission asset – Gurgaon Palwal Transmission Limited (“GPTL”), from Sterlite Power at an enterprise value of $150 million).
With this acquisition, IndiGrid’s AUM has increased by ~9% to $1.80 billion. IndiGrid’s asset portfolio will now consist of 10 power transmission projects, with a total network of 25 power transmission lines and 7 substations extending over ~6,080 circuit kilometres & 10,735 MVA in 15 Indian states.
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 built with a substantial focus on environmental, social and governance (ESG) aspects. It is a strategic asset for ensuring reliable power supply in the region which may reduce the carbon emissions by reducing dependence on DG sets. The land requirement for this project is also substantially reduced with innovatively designed vertical GIS substation and monopole towers with micro-piling.
The acquisition of GPTL was envisaged as part of the framework agreement signed with Sterlite Power in April 2019 for acquisition of three assets upon commissioning. This acquisition has been funded by internal accruals, proceeds from the preference issue done in May 2019 and new debt. With this investment, IndiGrid’s net debt/AUM will be at ~53%, significantly below the 70% leverage threshold as per SEBI InvIT Regulations.
Commenting on the acquisition, IndiGrid Chief Executive Officer Harsh Shah said this acquisition is in line with the strategy to acquire accretive assets with low operating risk and long-term certainty of cash flows.
“We continue our efforts to increase unitholders’ returns by creating a solid growth pipeline for the future while providing predictable distribution. IndiGrid has another $ 750 million pipeline of transmission projects under the framework agreement with Sterlite Power providing visibility of $2.50 billion of AUM over next two years. This acquisition is a testament to our consistent track record of aggregating good quality projects with the vision of enhancing investor returns while maintaining a strong balance sheet,” said IndiGrid Chief Executive Officer Harsh Shah.
Sterlite Power Group CFO Anuraag Srivastava said the company is proud to successfully close yet another asset sale in these unprecedented times.
“GPTL sale marks our ninth asset transfer to India Grid Trust. With this, we have transferred about $1.70 billion worth transmission assets to IndiGrid till date. The sale of this strategic project amidst a challenging market situation is a clear validation of the pioneering asset monetization model and our ability to commission high-quality projects with long term stable cash flows. We look forward to commissioning more assets and transfer about another $ 750 million worth of assets to IndiGrid over a period of time,” said Sterlite Power Group CFO Anuraag Srivastava.
In FY20, IndiGrid raised $ 340 million of capital by way of the preferential issue which was subscribed by KKR and GIC amongst other marquee investors. It acquired NRSS XXIX and OGPTL projects from Sterlite Power for $680 million. In addition to that, it had entered into an exclusive framework agreement with Sterlite Power toacquire three projects worth $890 million as and when they are commissioned, of which GPTL has now been acquired by IndiGrid. KKR also acquired majority interest in the Investment Manager of IndiGrid.
IndiGrid [BSE: 540565 | NSE: INDIGRID] is the first Infrastructure Investment Trust (“InvIT”) in the Indian power sector. It owns 10 operating projects consisting of 25 transmission lines with more than 6,080 ckms length and 7 substations with 10,735 MVA transformation capacity. IndiGrid has assets under management (AUM) worth ~INR 133 Bn (USD 1.80 Bn). The investment manager of IndiGrid is majority owned by KKR.
Sterlite Power is a leading global developer of power transmission infrastructure with projects of over 13,670 circuit kms and 24,800 MVA in India and Brazil. With an industry-leading portfolio of power conductors, EHV cables and OPGW, Sterlite Power also offers solutions for upgrading, uprating and strengthening existing networks.
The Company has set new benchmarks in the industry by use of cutting-edge technologies and innovative financing. Sterlite Power is also the sponsor of IndiGrid, India’s first power sector Infrastructure Investment Trust (“InvIT”), listed on the BSE and NSE. Sterlite Power has been recognised with prestigious global awards from S&P Global Platts and International Project Management Association (IPMA).