IndiGrid approves acquisition of Gurgaon Palwal Transmission
The acquisition will increase the AUM of IndiGrid by 10%
The Board of the Investment Manager of IndiGrid has approved acquisition of Gurgaon Palwal Transmission (GPTL) from Sterlite Power at a value of up to Rs 10.8 billion.
The acquisition will increase the AUM of IndiGrid by 10% to around Rs 133 billion.
The company’s portfolio will increase to 10 power transmission projects with a total network of 25 power transmission lines and seven substations that span across more than 6,080 circuit km and 10,735 MVA across 15 Indian states post this acquisition.
GPTL is part of the Inter State Transmission Scheme (ISTS) network and consists of three gas insulated substations (GIS) with a total transformation capacity of 3,000 MVA and approximately 270 circuit km of 400 KV transmission lines spread across Uttar Pradesh, Haryana and Rajasthan.
This project is built with substantial focus on environmental, social and governance (ESG) aspects.
The land requirement for the project is also substantially reduced with innovatively designed vertical GIS substation and monopole towers with micro-piling.
IndiGrid had inked a framework agreement in April 2019 with Sterlite Power for acquisition of GPTL upon commissioning. The acquisition, subject to unitholder’s approval and other customary closing adjustments, will be funded through internal accruals, proceeds from the preference issue done in May 2019 and new debt.
The acquisition will be accretive to IndiGrid and leave sufficient debt headroom, with net debt /AUM of around 53% post-acquisition.
This is the eight accretive acquisition since listing to add around Rs 35 to 40 crore of net distributable cash flow per year.
The company intends to acquire solar projects with robust power purchase agreements, operational track record and financially strong counterparties/off-takers.
In addition, the company also entered into an exclusive framework agreement with Sterlite Power to acquire three more projects worth around Rs 65 billion as and when they are commissioned. KKR also acquired majority interest in the Investment Manager of IndiGrid.