Sterlite Grid eyes Rs 3k-cr funds via infra trust

First such application from power transmission company, could raise up to Rs 3,000 crore

Sterlite Grid Power Ventures has applied to raise funds through Infrastructure Investment Trusts (InvITs), the first power infrastructure company to do so.

The company, a leading operator of independent power transmission networks, is likely to raise Rs 2,500-3,000 crore, said sources in the know.

To ease capital inflow for infrastructure companies, the Securities and Exchange Board of India (Sebi) issued norms last month for public issue of InvIT units. This allows mutual funds, pension funds and insurance companies to invest in the public issue of an InvIT. InvITs are allowed to invest in infrastructure projects directly or through a Special Purpose Vehicle.

Sources in the know said the company would use the fund partly to reinvest in existing projects, pump funds in the upcoming ones and to pare debt. The cumulative debt is Rs 3,500 crore, which includes Rs 925 crore of non-convertible debentures that it issued in January.

Pratik Agarwal, the chief executive would not disclose the details of his plan. “We are thankful to the government for benchmarking of infrastructure funding with the global capital market through InvITs. As an asset class, power transmission is best suited for long-term capital funds such as InvITs,” he said.

He said India would need a lot of investment in power transmission, as the sector grows with increasing energy demand.

Apart from upcoming projects, the funds are also likely to be used in projects with 20 per cent and more implementation status, said sources in the know. The fund raising would take a year to close, said executives.

Sterlite has Rs 10,000 crore worth of transmission projects in its portfolio. Around Rs 5,000 crore worth are under operation. The company has close to 10 inter-state transmission system projects which it won on tariff-based competitive bidding, three of these being big ones it got last year, totalling close to Rs 2,500 crore.

GRID EXPANSION

• Sterlite Grid  is likely to raise Rs 2,500–3,000 crore for upcoming power transmission  projects 
• Company would use the fund partly to reinvest in existing projects, pump funds in the upcoming ones and to pare debt
• The company has Rs 10,000 crore worth of transmission projects in its portfolio
• It is the first power infrastructure company to apply for InvITs
• InvITs are allowed to invest in infrastructure projects directly or through a SPV

The projects awarded were in line with the government’s commitment to attract investment worth Rs 1 lakh crore in the transmission sector.

Under corporate restructuring, Sterlite Technologies' application to demerge its power business into a separate unlisted company, Sterlite Grid, has been approved.

The telecom business continues to be with Sterlite Technologies.