Adani to buy transmission asset of KEC International for Rs 2.27 bn

Gautam Adani-promoted Adani Transmission will buy out KEC International’s Sikar transmission asset for Rs 2.27 billion; the two companies informed the exchanges separately on Saturday. 

“The company has entered into a share-purchase agreement with KEC International to acquire its entire stake of equity shares representing 99.99 per cent of the total issued, paid-up and subscribed equity share capital and preference shares in its subsidiary KEC Bikaner Sikar Transmission,” Adani Transmission said in a statement.

For Adani Transmission, which claims to be India’s largest private transmission company, this is the third purchase of a transmission and distribution asset in the last three years. In August, the company concluded the purchase of the Mumbai distribution business of Reliance Infrastructure for Rs 127 billion. In 2016, it acquired two transmission assets from GMR Energy for Rs 1 billion. The same year, Adani Transmission also entered into a share-purchase agreement with Reliance Infrastructure for the 100 per cent stake of its western region system strengthening scheme (WRSSS) transmission assets.

The Bikaner-Sikar transmission line was commissioned in December 2017 and its acquisition is expected to be completed in two to three months. 

KEC International said the sale was in line with its strategy to focus on the engineering, procurement and construction (EPC) business. “We are happy to inform that in line with our strategy of being an asset-light company focused on providing turnkey services to the infrastructure sector, we have decided to sell our holding in KEC Bikaner Sikar Transmission,” said Vimal Kejriwal, managing director and chief executive officer, KEC International.

According to the Adani Transmission’s website, it has set a target to set up 20,000 circuit km transmission lines by 2022. “With this acquisition, the cumulative network of ATL will reach 12,923 ckt km, of which approximately 10,357 ckt km is under operation and 2,566 ckt km under various stages of construction,” the company said in the statement. 

In December 2017, CRISIL estimated that inter-state transmission system (ISTS) projects present a Rs 300 billion refinancing opportunity for the bond market over the next three years as 14,000 ckt km of under-construction lines come on stream.

Powering up the biz

• Aug 2018: Adani Transmission concludes the purchase of Mumbai distribution business from Reliance Infrastructure for Rs 127 bn
• 2016: Adani acquires two transmission assets from GMR Energy for Rs 1 bn 
• Company enters into a share purchase agreement with Reliance Infra for its WRSSS transmission assets