The newly-announced acquisition of Khargone Transmission Ltd by India Grid Trust (IndiGrid) is expect to add around Rs.85 crore per year to the InvIT’s net distribution cash flow, IndiGrid said in a statement.
It may be recalled that earlier this month, IndiGrid signed a binding share purchase agreement for acquiring 100 per cent equity interest in Khargone Transmission Ltd (KTL) from Sterlite Power for an enterprise value of around Rs.14,97.50 crore, subject to closing working capital and other customary adjustments and unitholders’ approval.
This acquisition is expected to consummate in Q4 (January to March) of ongoing FY23. KTL consists of six elements across 626 ckm of transmission network and a 765/400kV AIS substation.
The acquisition of KTL would boost IndiGrid’s portfolio to around Rs.22,700 crore (or $2.8 billion) AUM (assets under management) and is expected to add Rs.85 crore to IndiGrid’s net distributable cash flow annually.
Impact on portfolio
Upon KTL’s acquisition, the platform’s asset portfolio would consist of 17 power transmission projects with a total network of 46 power transmission lines and 13 substations extending over 8,420 ckm and 17,550 MVA transformation capacity, along with and 100 mw (AC) of solar generation capacity.
It may be mentioned that the solar power generation capacity of 100 mw was acquired from Fotowatio Renewable Ventures in July 2021. This operational solar farm (known as “SOLAR I & II”) is located within the Ananthapuram Solar Park in Andhra Pradesh.
Agreement with GRIL
During Q3 of FY23, IndiGrid also entered into a framework agreement with GR Infraprojects Ltd (GRIL) for acquisition of Rajgarh Transmission Ltd (RTL) upon its commissioning. Additionally, IndiGrid also inked a MoU with GRIL to jointly bid for transmission projects worth Rs.5,000 crore.
Focus on long-term cash flows
Commenting on the acquisitions, Harsh Shah, CEO, IndiGrid, observed, “We are delighted to announce deal signing of IndiGrid’s 15th transmission asset, Khargone Transmission Ltd, last of the framework assets with Sterlite. These acquisitions — KTL and Raichur-Sholapur Transmission Company Pvt Ltd — and the GR partnership are in line with IndiGrid’s growth plan and strategy to focus on operating assets with long term cash flows and minimal counter party risk.”
Featured photograph shows an element of the transmission project of Raichur Sholapur Transmission Company Pvt Ltd (RSTCPL), now acquired by IndiGrid.
