The board of directors of India Grid Trust (IndiGrid) has approved the acquisition of 100 percent units of Virescent Renewable Energy Trust (VRET) along with its Investment Manager (IM) and Project Manager (PM), at an enterprise valuation of Rs.4,000 crore.
In a release, IndiGrid said that the acquisition is subject to closing adjustments, the transaction followed a competitive bidding process, and is subject to requisite regulatory and unitholder approvals.
An accretive addition, the acquisition will be funded through a combination of internal accruals, debt, and further capital raise and is expected to add around Rs.200 crore annually to IndiGrid’s net distributable cash flow (NDCF), annually.
Also read: Virescent Infrastructure Raises Rs.460 Crore In India’s First RE-InvIT
Portfolio of over 500 MW
VRET is India’s first and only renewable energy Infrastructure Investment Trust (InvIT) comprising a portfolio of 16 operational solar projects through 14 SPVs across seven states and with a cumulative capacity of 538 MWp.
Sponsored by KKR, VRET is an AAA-rated InvIT with a strong institutional framework comprising of marquee unitholders such as AIMCO, Utilico, L&T, and others. VRET’s assets have around 7 years of operational history and about 18 years of average remaining tenure with PPAs with strong counterparties enabling it to manage a healthy receivables profile, the release said.
Post this acquisition, IndiGrid’s AUM will increase to Rs.26,900 crore, its net debt to AUM will reach around 65 per cent, and the overall solar assets portfolio will be at 674 MWp.
Strategically-focused move
According Harsh Shah, Chief Executive Officer & Whole Time Director of IndiGrid, said, “In line with our identified strategic focus areas, we recently entered into definitive agreements to acquire units of Virescent Renewable Energy Trust, subject to requisite regulatory and unitholders’ approvals. Upon consummation, this will be a landmark acquisition for IndiGrid and will provide an impetus in the renewable space, augment asset management capability and result in sizeable accretion.”
Other developments
Meanwhile, during Q4 (January to March) of FY23, IndiGrid welcomed International Finance Corporation (IFC) as an investor in its NCDs. IFC subscribed to a listed NCD issuance of the investment trust aggregating to Rs.1,140 crore for a total tenure of 18 years.
With respect to acquisitions, IndiGrid completed the acquisition of the interstate transmission asset, Khargone Transmission Ltd, for an enterprise value of Rs.1,500 crore. Including Khargone Transmission, IndiGrid ended the quarter with an AUM of Rs.22.800 and a net debt to AUM of around 59.5 percent, leaving significant debt headroom for further growth.
The featured photograph shows a solar power project at Rajapalayam in Tamil Nadu, which is part of VRET’s solar portfolio.
