IndiGrid, India’s first power-sector infrastructure investment trust (InvIT), is looking to acquire operational solar assets as part of its diversification strategy, with an outlay of up to Rs 5,000 crore.
The move comes after completion of five years of profitable operation of the transmission assets-based InvIT. “IndiGrid now holds Rs 21,000 crore of assets that gives us the headroom to diversify into other assets,” said Harsh Shah, CEO. For the time being, IndiGrid would not venture into areas other than power transmission and solar projects, he added.
“We can bring anywhere between Rs 4,000 crore-5,000 crore worth of profitable solar projects under the current InvIT,” he said, adding that there was no plan to float a new solar-specific trust. Rather than big-ticket solar projects, IndiGrid would scout for small and profitable ones, which are cost-effective.
The company in the last one year has acquired projects worth Rs 7,500 crore which included the first solar asset for Rs 660 crore bought in July 2021.
IndiGrid’s right issue in April for Rs 1,284 crore was oversubscribed 1.25 times, and this created the headroom for growth. In May 2021, IndiGrid also launched the first public non-convertible debenture issue by any REIT or InvIT in the country to diversify its sources of debt and increase the debt tenure.
“Our net debt to AUM as of June 30, 2021, stood at around 58%, which is well below the 70% cap prescribed under the Sebi regulations,” Shah said.
In Q1FY22, IndiGrid’s net revenue and operating profit grew 53% each year-on-year to Rs 554 crore and Rs 504 crore, respectively. The earnings were supported by acquisitions and strong operational performance.
The board also approved a distribution per unit (DPU) of Rs 3.19. The record date for the distribution is August 5, 2021, and shall be paid as Rs 3.04 per unit in the form of interest and Rs 0.15 per unit as dividend. In the last 17 quarters since its listing, IndiGrid has distributed Rs 48.96 per unit to its investors, which is a total return of over 83% on the issue price.
KKR and GIC together hold around 45% in IndiGrid, while Sterlite Power holds 40% in the investment manager arm of IndiGrid.