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India Grid Trust.

BSE: 540565 Sector: Infrastructure
NSE: INDIGRID ISIN Code: INE219X23014
BSE 00:00 | 18 Jun 131.91 0.11
(0.08%)
OPEN

131.79

HIGH

132.00

LOW

131.71

NSE 00:00 | 18 Jun 131.84 0.02
(0.02%)
OPEN

131.82

HIGH

131.95

LOW

131.50

OPEN 131.79
PREVIOUS CLOSE 131.80
VOLUME 13608
52-Week high 144.00
52-Week low 95.13
P/E 8.61
Mkt Cap.(Rs cr) 9,236
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 131.79
CLOSE 131.80
VOLUME 13608
52-Week high 144.00
52-Week low 95.13
P/E 8.61
Mkt Cap.(Rs cr) 9,236
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

India Grid Trust. (INDIGRID) - Chairman Speech

Company chairman speech

Dear Unitholders

At the outset I thank you for your continuous support as IndiGrid completes 3 yearsof its operations and listing on Indian stock exchanges this financial year. We areprivileged to share with you our growth story via this Annual Report for the financialyear 2019-20.

First and foremost let us talk about the biggest crisis of the current century - thenovel coronavirus pandemic the outbreak of which has become a major threat to the entiremankind with more than 196 countries affected worldwide. The nationwide lockdown resultedin shutdown of industrial and commercial establishments which adversely impactedelectricity demand given that these segments constitute about 40% of the overall demand.However household electricity consumption during the period has increased substantially.Similarly with opening of lock down across the country the industrial and commercialdemand has started picking up again. This has put in a concentrated effort on maintainingthe stability and continuity of grid. IndiGrid and especially its asset management teamshave been up to the task during this period and have been instrumental in ensuring safeoperations of the asset portfolio and the national grid without disruption. During thelock down period not only have we focused on maintaining highest levels of availabilitywe have also focused on growing the underlying asset portfolio.

Resilient growth

Notwithstanding the current pandemic and its ongoing challenges we continue to dobusiness unabated.

We continue to focus on growing our portfolio and maintaining the underlying portfolioto the highest standards of reliability especially in this volatile period.

Our business has been built on solid fundamentals of transparency governance andproviding superior risk-adjusted returns to our unitholders. We concentrated on these inthe last twelve quarters since our listing and have made remarkable progress on allfronts during this period – regulatory engagement robust asset management sustainedportfolio expansion superior returns and sound financial performance.

The biggest goal however is to provide an inclusive ownership of India's powerresources to a much larger investor base while ensuring a strong and robust corporategovernance a key tenet for inclusive ownership as the foundation of our unique platform.

Since our listing in June 2017 maintaining steady growth amidst volatility has beenour key focus and we continue to be proud of our achievements over the past three years.Today we have 9 power transmission projects with a total transmission network length ofmore than 5800 circuit kilometres length and around 7735 MVA transformation capacityacross 12 states and 1 union territory in India in contrast with 2 power transmissionprojects with 1930 circuit kilometres and 6000 MVA transformation capacity at the timeof our inception.

Since listing our assets under management (AUM) have increased more than threefoldfrom INR 38 billion to INR 121 billion on the back of accretive acquisitions. With asuccessful three-year track record of robust operations and acquisitions we continue topursue several avenues of growth for creating value for our unitholders.

FY2020 in brief

The financial year under review has been transformational for IndiGrid. We have almostdoubled our market capitalisation over the last three years to approx INR 60 billioncurrently on the back of our successful follow-on equity raise worth INR 25 billion in May2019. This was raised through a preferential issue of units to qualified institutionalinvestors of which a majority portion has been subscribed by KKR GIC and other marqueeinstitutional investors. As part of this transaction Sterlite Investment Managers Limitedor the investment manager of IndiGrid is now majorly owned by KKR.

KKR ushers in a unique set of resources including investment and asset managementexpertise which can be further leveraged to evaluate acquisition opportunities. It alsobrings a deeply connected investor and developer network along with strong access to itsown capital. It gives us visibility and the requisite investor support to maintain andaccelerate our growth trajectory.

In terms of financial performance Revenue and EBITDA numbers stood at INR 12.43billion and INR 11.50 billion for the current financial year registering YoY growth of87% and 91% respectively. EBITDA margins were robust at 91% underlying the strongfundamentals of the business. On the distribution front our asset acquisitions haveenabled us to successfully distribute twelve straight quarters of distribution. Thisaggregated to a total of INR 33.56 per unit or over INR 13 billion to our unitholders overthe last three years or a 34% absolute return since the IPO making IndiGrid one of themost attractive yield platforms in India.

Growth via strategic acquisitions

Our strategy is to focus on accretive acquisitions to provide superior total returns toour investors. We look at long term stable cash flow and minimal counterparty riskprojects as a part of this acquisition strategy. With growth in our AUM and our cash flowprofile we target long-term superior distributions to our unitholders. During the yearwe completed three acquisitions with assets worth more than INR 60 billion. While NRSSXXIX Transmission Ltd (NTL) and Odisha Generation Phase II Transmission Ltd (OGPTL) wereacquired in H1 of the financial year we completed the acquisition of our ninthtransmission asset from Sterlite Power in H2 of the financial year as we acquired theEast North Interconnection Company

Limited (ENICL) at an enterprise value of INR 10.2 billion. The completion of thistransaction despite the lockdown is a testament to our commitment to increase unitholdervalue on an ongoing basis.

The acquisition is in line with our strategy to acquire accretive assets with long-termcertainty of cash flows. We have another INR 65 billion of transmission projects in thepipeline under our framework agreement with Sterlite Power. With this we are on track toachieve assets under management of INR 180 billion over the next two years. As per theagreement we will acquire three more assets from Sterlite Power over the next 6-18months. We remain fully capitalized to consummate the above mentioned acquisitions in theproposed time frame.

Exploring solar

As a part of our growth strategy we are moving a step ahead by diversifying intorenewables and exploring solar power assets. This diversification will be substantiallyyield-accretive and is expected to provide predictable and growing distribution to theinvestors besides having good synergies with our business model.

We plan to venture into utility scale solar a matured segment with low risk profile.Our continued focus will be on accretive acquisition of stable solar projects withlong-term stable cash flows good quality plants long contracts strong PPA frameworksand financially strong and highly creditworthy counterparties. This will further put us onthe path to move forward with vigour and become the more admired yield vehicle in Asia.

The right regulatory push

Over the last financial year with reduction in lot size for InvIT investors to INR 0.1million and increase in leverage limits for an InvIT albeit with increased complianceIndiGrid has seen growth in both trading volumes and retail participation in its listedunits. The issuance of Securities and Exchanges Board of India (SEBI) guidelines forrights issue by an InvIT during the current financial year is another welcome move.Induction of new sponsors or investment by