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IndiGrid to raise Rs 27.5 billion for acquisition, refinancing old debt

Will raise Rs 15 bn in equity; Bond offering Rs 12.5 bn

IndiGrid

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Abhijit Lele Mumbai

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Global investment firm KKR-backed India Grid Trust (IndiGrid) plans to raise Rs 1,250 crore via debentures to refinance old debt and acquisition.

IndiGrid, which manages power transmission and power generation assets, would also raise up to Rs 1,500 crore in equity to bring down the ratio of debt to assets under management to 60 per cent from 65 per cent for prudent financial management.

In May 2023, IndiGrid had announced the acquisition of 100 per cent of Virescent Renewable Energy Trust (VRET), along with its investment manager and project manager. The deal is expected to be valued at Rs 4,000 crore, subject to regulatory approvals and closing adjustments.  

Crisil Ratings has assigned its “AAA/Stable” rating to the Rs 1,250 crore non-convertible debentures (NCDs) of IndiGrid, an infrastructure investment trust (InvIT). The rating continues to reflect the stable revenue of the trust.

The entity has a healthy track record of maintaining transmission line availability higher than normative levels and 35-year transmission service agreements (TSAs) which ensures steady cash flow.  

IndiGrid, set up on October 21, 2016, had AUM of Rs 22,800 crore as on March 31, 2023. VRET, backed by US-based private equity firm KKR houses 16 operational solar assets with a combined capacity of around 538 MWp. Post-acquisition of VRET, solar AUM would account for around 15 per cent of the total AUM of IndiGrid.

The acquisition funded through debt would lead to the ratio of net debt to assets under management (AUM) going up to around 65 per cent from around 60 per cent at present. Post the equity infusion, the debt to AUM is expected to decline to 60 per cent. Thus,  the ratio will remain within the cap of 70 per cent set by the Securities and Exchange Board of India (SEBI).

CRISIL Ratings said while IndiGrid has entered the renewable and project development spaces, InVIT will still largely specialise in the operational power transmission space. The renewable sector is riskier than the highly stable power transmission sector. It will continue to closely monitor any further diversification and its impact on the credit profile of IndiGrid, the rating agency added.

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First Published: Jul 23 2023 | 6:43 PM IST

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