IndiGrid, India’s first Infrastructure Investment Trust in the power sector, has approved the acquisition of three power transmission assets from its sponsor Sterlite Power Grid Ventures Ltd at a value of INR 14.9 billion. These acquisitions result in a 40% increase in AUM, from INR 38 billion to INR 53 billion. 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.

 

Commenting on the acquisition, Pratik Agarwal, Chief Executive Officer, IndiGrid, said, “These three acquisitions reaffirm our strong commitment to growing the IndiGrid platform through accretive transactions of operational power transmission assets, which have long-term cash flows and low counterparty risks. We will continue to pursue all such growth opportunities, including third party assets.”

 

The proposed acquisition will be funded entirely through debt in order to utilise 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.