India Grid Trust (IndiGrid), India’s 1st energy-sector infrastructure investment trust (InvIT), completed acquisition of a transmission network in the northeastern states of Assam, Arunachal Pradesh and Tripura from Sterlite Power at an enterprise worth of `4,625 crore, the firm stated on Saturday.
With this acquisition, the biggest in the segment, IndiGrid’s asset below monetisation (AUM) has risen 34% to about `20,000 crore. The platform’s asset portfolio now consists of 13 energy transmission projects, with a total network of 38 energy transmission lines and 11 substations extending more than about 7,570 circuit kilometres.
NER-II Transmission Ltd (NER-II) that has been acquired is element of the inter-state transmission scheme network, with a develop, personal, operate and sustain contract of 35 years. It gives electrical energy to about 5.3 crore folks in the 3 states.
Harsh Shah, chief executive officer at IndiGrid, stated FY21 has been a transformational year for IndiGrid with Rs 7,500- crore acquisitions across inter-state transmission, intra-state transmission, and regulated tariff transmission projects as nicely as a solar project.
The acquisitions will allow the InvIT to raise its dividend distribution per unit (DPU) additional. The DPU is at the moment Rs 12.40 per annum.
“Going forward, with a robust acquisition pipeline and proposed equity infusion via rights issue, IndiGrid is in steadfast position to capitalise on the growth opportunities..,” the firm stated. “The acquisition of NER-II was envisaged as part of the framework agreement signed with Sterlite Power in April 2019. The investment manager of IndiGrid had signed a definitive share purchase agreement for the acquisition of NER-II on March 5, 2021,” it added.
KKR and GIC collectively hold about 45% in IndiGrid, although Sterlite Power holds 40% in the investment manager arm of IndiGrid.
Cyril Amarchand and Mangaldas, PriceWaterHouse Coopers, L&T-S&L and J Sagar Associates advised IndiGrid on this transaction.
InvITs are developed to handle income-producing infrastructure assets these have a tendency to provide standard yield to investors. The structure is also noticed to make readily available an option route to raise funds to state-run firms, offered the government’s budgetary constraints.