India Grid Trust (IndiGrid), an infrastructure investment trust, plans to acquire up to four inter-state power transmission projects from Sterlite Power, the sponsor. This will be done under the right of first offer (ROFO) by end FY18, taking the project portfolio to six from two at present. Pratik Agarwal, chief executive officer said the four interstate projects have a topline of Rs 300 crore and would add around 50-60% growth in topline post acquisition. “We are working on financing packaging as to which assets to acquire. The idea is to add projects that lead to 3-5% growth in distribution per unit. We have sufficient headroom to raise debt according to Sebi guidelines, and we will raise debt to make these acquisitions and pay out the sponsor,” Agarwal said.
“The company has a ROFO over eight assets but the endeavour is to acquire at least four this year. Going ahead, we plan to raise the asset under management to Rs 30,000 crore in the next five years from Rs 3,500 crore at present,” Agarwal said. The four assets being acquired are East North Interconnection Company, Purulia and Kharagpur Transmission Company, RAPP Transmission Company and Maheshwaram Transmission.
Agarwal adds transmission assets are extremely stable as Sebi, does not allow under-construction projects under the InvIT, reducing the greenfield risks of the investors. Hence there is nothing like organic growth under InvITs. However, “transmission assets have annuity like revenue stream, so there is no downside or upside in the revenue making them very stable. The growth comes from acquisitions, and since the sponsor (Sterlite Power) already has a very healthy portfolio of assets, almost four times the initial portfolio is available with the sponsor for IndiGrid to acquire. It gives the certainty to IndiGrid to grow over the next few years,” Agarwal said.
The company has announced first distribution of Rs 0.92 per unit to investors for the first month since its initial public offer in June. This will be paid as interest to unit holders. The record date for this distribution will be August 4. The company has also decided to amend its distribution policy and adopt a quarterly distribution instead of semiannual distribution. The company has also affirmed the full year distribution at Rs 11 per unit.