CRISIL has assigned a corporate credit rating of CCR AAA to India Grid Trust, an infrastructure investment trust (InvIT) established by Sterlite Power Grid Ventures.
The rating reflects stable revenue of the operational special purpose vehicles (SPVs) to be acquired by IndiGrid, cash flow stability under the point of connection (PoC) pool mechanism, and a strong financial risk profile due to de-leveraging of these SPVs, CRISIL said in a statement.
However, these strengths are partially offset by moderate operations and management (O&M) risks that the underlying assets of the SPVs are exposed to, it said.
For arriving at its rating, CRISIL has combined the business and financial risk profiles of IndiGrid with the SPVs which it proposes to acquire: Bhopal Dhule Transmission Company (BDTCL) and Jabalpur Transmission Company (JTCL). This is because of IndiGrid’s 100% shareholding in these SPVs and management’s intention to support them in case of any exigencies, the statement said.
The proceeds from the listing of IndiGrid (to be infused through nonconvertible debentures [NCDs] in BDTCL and JTCL) will be used to repay external debt as well as unsecured loans from SPGVL in these SPVs. Consequently, the external debt at JTCL is expected to reduce to zero from R1,015 crore at present, and at BDTCL to R1,000 crore from R1,529 crore at present.
Thus, on a consolidated basis, the debt at IndiGrid will reduce to R1,000 crore, in comparison with the combined debt of R2,544 crore in BDTCL and JTCL at present.