Infrastructure investment trust in the power sector IndiGrid, today said it has has approved the acquisition of three power transmission assets from its sponsor Sterlite Power Grid Ventures at a value of Rs 1490 crore. These acquisitions result in a 40 per cent increase in assets under management, from Rs 3800 crore to Rs 5300 crore, IndiGrid said in a statement here. The three assets consist of 5 transmission lines, increasing its total portfolio to 13 transmission lines and two substations across 8 states, it added. These inter-state assets were awarded on perpetual basis on a Build, Own, Operate and Maintain model through competitive bidding. They have a long residual contractual life of about 34 years and are operating under the Point of Connection (PoC) mechanism in India, thereby significantly de-risking the revenues, the statement explained. "These three acquisitions reaffirm our strong commitment to growing the IndiGrid platform through accretive transactions of operational power transmission assets, which have long-term cash flows and low counter party risks," Pratik Agarwal, Chief Executive Officer, IndiGrid said. "We will continue to pursue all such growth opportunities, including third party assets," he further added. The proposed acquisition will be funded entirely through debt in order to utilise the available headroom, the company said. These assets have the same characteristics as the existing assets of IndiGrid which is AAA rated.
This acquisition will increase IndiGrid's debt to assets ratio from 26 per cent to nearly 49 per cent. The transaction is subject to customary regulatory and unit holders approvals and is expected to be completed in the first quarter of 2018.
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