Global investment firm KKR-backed India Grid Trust (IndiGrid), an infrastructure investment trust, is planning to raise Rs 1,000 crore via non-convertible debentures (NCDs) to finance acquisitions and repayment of existing debt.
IndiGrid has announced the acquisition of 100 per cent of ReNew Solar Urja Private Limited (RSUPL). The deal is expected to be valued at Rs 1,650 crore, subject to regulatory approvals and closing adjustments. This includes the debt of around Rs 1,000-1,100 crore present at asset level. The pending consideration amount is to be funded through debt.
Rating agency CRISIL Ratings has assigned its “AAA” rating to these NCDs. The rating continues to reflect the stable revenue of the trust, with almost all underlying transmission special-purpose vehicles (SPVs) operating under the point of connection (PoC) mechanism.
IndiGrid had a cash balance of Rs 1,400-1,500 crore, which includes a debt service reserve account (DSRA) and fixed deposit (FD) of Rs 450-500 crore as on December 31. Maintenance of a three-month DSRA/ISRA also supports liquidity, the rating agency said.
In the first half of the current financial year, IndiGrid acquired Virescent Renewable Energy Trust, which dealt with solar projects. It has raised equity of Rs 1,073 crore this financial year and has used this to prepay debt.
ReNew Solar Urja has a solar asset of 300 megawatts (Mw). The solar asset has residual power purchase agreements (PPAs) of 23 years with Solar Energy Corporation of India Limited (SECI) as the counterparty. This ensures long-term cash flow visibility. The operational performance in terms of plant load factor (PLF) has been better. Post-acquisition of RSUPL, solar Assets Under Management (AUM) accounts for around 20 per cent of the total AUM of IndiGrid.
CRISIL said while IndiGrid entered the renewable and project development segments, it would continue to get the majority of its cash flows from operational power transmission assets. As the renewable sector is riskier than the highly stable power transmission sector, CRISIL will continue to closely monitor further diversification and its impact on the credit profile of IndiGrid.