The board of the investment manager of IndiGrid has approved the acquisition of Gurgaon Palwal Transmission (GPTL) from Sterlite Power at a value of up to Rs 1,080 crore ($140 million).
The board of the investment manager of IndiGrid has approved the acquisition of Gurgaon Palwal Transmission (GPTL) from Sterlite Power at a value of up to Rs 1,080 crore ($140 million).This acquisition would increase the assets under management (AUM) of India’s first InvIT in the power sector by 10% to $1.75 billion. IndiGrid’s portfolio will increase to ten power transmission projects with a total network of 25 power transmission lines and seven substations that span more than 6,080 circuit km & 10,735 MVA across 15 Indian states post this acquisition.
GPTL is part of Inter State Transmission Scheme (ISTS) network and consists of three gas insulated substations (GIS) with a total transformation capacity of 3,000 MVA and 270 circuit km of 400 KV transmission lines spread across Uttar Pradesh, Haryana and Rajasthan.
IndiGrid had signed a framework agreement in April 2019 with Sterlite Power for acquisition of GPTL upon commissioning. The acquisition, will be funded through internal accruals, proceeds from the preference issue done in May 2019 and new debt.
The acquisition will be accretive to IndiGrid and will leave sufficient debt headroom, with net debt to AUM of approximately 53% post acquisition.
Commenting on the acquisition and the expansion strategy, Harsh Shah, chief executive officer of IndiGrid, said: “GPTL acquisition is in line with our strategy for acquiring transmission projects to grow returns for unitholders. It underlines our ability to grow our portfolio consistently and execute our strategy of enhancing investor returns while maintaining a strong balance sheet”.
Earlier in the year, IndiGrid raised `2,510 crore ($353 million) of capital by way of preferential issue, which was subscribed by KKR and GIC amongst other marquee investors. It acquired NRSS XXIX and OGPTL projects from Sterlite Power for about `5,100 crore ($718 million).
In addition to that, it entered into an exclusive framework agreement with Sterlite Power to acquire three more projects worth around `6,500 crore ($865 million) as and when they are commissioned. KKR also acquired majority interest in the Investment Manager of IndiGrid. In Q4FY20, IndiGrid successfully acquired another operational ROFO asset ENICL from Sterlite Power.