Power transmission developer Sterlite Grid 32 Ltd (SGL32) on Monday announced securing Rs 2,450 crore through listed non-convertible debentures (NCDs) to refinance its Mumbai Urja Marg Ltd project. The funds for refinancing were raised from the National Bank for Financing Infrastructure and Development (NaBFID) and India Infrastructure Finance Company Limited (IIFCL).
This is the first listed NCD issuance of the company after its joint venture with GIC of Singapore. Speaking to FE, director, Sterlite Grid 32 Ltd, said: “This transaction has helped us diversify from its traditional sources of debt financing to debt capital market financing. The JV now has access to a stronger alternative source of funds.”
The JV won the MUML project in June 2020 through Tariff-Based Competitive Bidding (TBCB) to execute the green energy corridor project on a BOOM (build, own, operate, maintain) basis for 35 years. The MUML project has established a transmission system covering the Western Region Strengthening Scheme-XIX (WRSS-XIX) and the Northeastern Region Strengthening Scheme-IX (NERSS-IX), spanning Maharashtra, Gujarat, Assam, and Arunachal Pradesh.
The project has the potential to carry more than 2,000 MW of additional power to Mumbai and Navi Mumbai, the company said.
“The coupon for this project was around 9.75% and we brought it down to around 8%,” George said. “The initial loan was Rs 2,070 crore, so we released some equity through refinancing. The new issuance was Rs 2,450 crore, so we topped up the loan by Rs 380 crore. We released some of our equity which made the project more profitable than what it was earlier,” he added.
The company also plans to refinance its Nangalbibra project which has a loan of about Rs 500 crore. “We plan to refinance it with a top-up of about 70-100 odd crores by way of NCDs,” George said. “In future also, we are planning to move away from debt equity financing or rather the conventional or regular banks to tap into debt capital markets.”
While the company aims to remain focused on the Indian market, it is evaluating to diversify into certain other geographies in Europe for the evacuation of wind energy.
“We are studying a few geographies in Europe (for diversification) other than India but not aggressively looking to expand in other geographies. The recent announcement by the UK government for promoting offshore and onshore wind is exciting and the amount of investment is also exciting,” said George.
The infrastructure business of Sterlite Power Transmission Ltd was demerged into Sterlite Grid 5 Ltd effective October 08, 2024. SGL5 recently entered into a joint venture with GIC of Singapore, following which SGL5 is to execute all its transmission projects in India through SGL32.
The company’s portfolio in India comprises 10 completed, and under construction power transmission projects in eight states including Rajasthan, Gujrat, Jammu, Kashmir, Karnataka, Haryana, Maharashtra, Goa, and Kerala from the perspective of transmission connectivity. It has 4,500 km of transmission lines, through a total capex of Rs 25,000 crore.