India Grid Trust (IndiGrid) is set to acquire a major solar power asset from ReNew Power.
In a release, IndiGrid said that it has signed a share purchase agreement with ReNew Solar Power Pvt Ltd (RSPPL) to acquire their asset ReNew Solar Urja Pvt Ltd (RSUPL) at an enterprise valuation of Rs.1,550 crore.
The valuation, including net working capital and cash,will be around Rs.1,650 crore. This acquisition will be funded through a combination of equity, internal accruals, and debt. The net debt/AUM will be around 62.5 per cent post this acquisition, leaving adequate headroom for future growth, IndiGrid said.
IndiGrid will acquire 100 per cent shareholding and management control of RSUPL, subject to requisite regulatory approvals.
The solar asset
Operational since December 2021, RSUPL is a 300 MW (AC) solar generation asset located in Jaisalmer, Rajasthan with a 25-year Purchase Power Agreement (PPA) with Solar Energy Corporation of India (SECI) to sell power generated at tariff of Rs.2.71 per unit. The project has been operational and revenue generating for around 2 years and the balance term of PPA is abou 23 years.
Impact on portfolio
RSUPL is a strategic addition to IndiGrid’s portfolio as it would be the largest capacity project located at a single site for the company. With this acquisition, IndiGrid’s peak solar capacity will cross1 GW of operating solar assets and the total Assets Under Management (AUM) of Rs.285 billion.
Strategic value of RE assets
Commenting on the acquisition, Harsh Shah, Chief Executive Officer, and Whole Time Director of IndiGrid, said,” India is witnessing a steep increase in its power demand to fuel its rapid economic growth. In view of India’s focus on energy transition, we are confident of the strategic value of renewable energy projects in the coming decades. RSUPL is a high-quality solar generation asset located in one of the highest irradiation regions of India with reasonable operating track record. In-line with our strategic focus, RSUPL will help us ensure sustainable growth of our portfolio and aidin long-term cash-flow addition.”
Fund raising
During the first nine months of ongoing FY24, IndiGrid has done equity fund raising to the tune of Rs.1,050 crore through preferential allotment and institutional placement. This has paved growth headroom for the company of Rs.6,000 – Rs.7,000 crore, at a leverage threshold of 70 per cent as per SEBI InvIT Regulations, IndiGrid said.
Also read: IndiGrid Wins Two ISTS Schemes In TBCB Mode
Featured photograph (source: IndiGrid) is for representation only.
