IndiGrid Completes Acquisition of GPTL Transmission Project for Rs 1080 Cr

IndiGrid has completed the acquisition of the GPTL transmission project from Sterlite Power at an enterprise value of Rs 1080 crore.

The India Grid Trust (IndiGrid), India’s leading infrastructure investment trust, has announced that it has completed the acquisition of another transmission asset – Gurgaon Palwal Transmission Limited (GPTL), from Sterlite Power at an enterprise value of Rs 1080 crore. With this acquisition, the firms’ AUM has increased by roughly 9 percent to Rs 13300 crore.

The trust’s asset portfolio will now consist of 10 power transmission projects, with a total network of 25 power transmission lines and 7 substations extending over ~6,080 circuit kilometres and 10,735 MVA in 15 Indian states.

About the Project:

GPTL is part of the 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 kilometers of 400 KV transmission lines spread across Uttar Pradesh, Haryana and Rajasthan. This project is built with a substantial focus on environmental, social and governance (ESG) aspects. It is a strategic asset for ensuring reliable power supply in the region which may reduce the carbon emissions by reducing dependence on DG sets. The land requirement for this project is also substantially reduced with innovatively designed vertical GIS substation and monopole towers with micro-piling.

The acquisition of GPTL was envisaged as part of the framework agreement that IndiGrid signed with Sterlite Power in April 2019 for the acquisition of three assets upon commissioning. This acquisition has been funded by internal accruals, proceeds from the preference issue done in May 2019 and new debt. With this investment, the firms’ net debt/AUM will be at approximately 53 percent, significantly below the 70 percent leverage threshold as per SEBI InvIT Regulations.

Harsh Shah, CEO of IndiGrid, said that “this acquisition is in line with our strategy to acquire accretive assets with low operating risk and long-term certainty of cash flows. We continue our efforts to increase unitholders’ returns by creating a solid growth pipeline for the future while providing predictable distribution.

“IndiGrid has another Rs 5500 crore pipeline of transmission projects under the framework agreement with Sterlite Power providing visibility of 18000 crore of AUM over the next two years. This acquisition is a testament to our consistent track record of aggregating good quality projects with the vision of enhancing investor returns while maintaining a strong balance sheet.”

In FY20, IndiGrid raised Rs 2510 crore of capital by way of a preferential issue which was subscribed by KKR and GIC amongst other marquee investors. It then acquired NRSS XXIX and OGPTL projects from Sterlite Power for Rs 5000 crore. In addition to that, it had entered into an exclusive framework agreement with the firm to acquire three projects worth Rs 6500 Crore as and when they are commissioned, of which GPTL has now been acquired by IndiGrid. KKR also acquired a majority interest in the Investment Manager of IndiGrid.