India Grid Trust (IndiGrid), India’s first power infrastructure investment trust (InvIT), announced the completion of acquisition of 100% stake in two solar assets with cumulative capacity of 100 MW (AC) from Fotowatio Renewable Ventures (FRV) at an enterprise value of ~INR 6.6 Bn.
“With this acquisition, our asset portfolio will now consist of 14 diversified power projects consisting of 40 transmission lines (~ 7,570 ckms) ,11 substations (~13,550 MVA capacity) and 100 MW of solar power plants across 18 states and one Union Territory,” the company said in its press release.
IndiGrid’s acquisition of its first solar asset is an important milestone in the Indian infrastructure sector as this marks the first renewable energy acquisition by any InvIT in the country, it added.
This transaction is in line with IndiGrid’s strategy to acquire solar projects with long term power purchase agreements, operational track record and financially strong counterparties / off-takers such as SECI and NTPC. In addition to long contract life and low-risk cash flows, this asset complements IndiGrid’s transmission portfolio with synergies on operations and regulatory establishments, it said.
The acquisition will be funded through a combination of debt, internal accruals and recent Rights Issue. The net debt/AUM stands around 58% post this acquisition, providing adequate headroom for growth against the 70% leverage threshold as per SEBI InvIT Regulations, the statement said.
Commenting on the acquisition, Harsh Shah, Chief Executive Officer of IndiGrid, said “We are excited to diversify our portfolio and add the first set of solar assets. This acquisition is DPU accretive and would result in healthy addition to our net distributable cash flow. While power transmission assets remain at the core of IndiGrid’s growth strategy, we believe such attractive opportunities to acquire good quality solar projects ties in well with our strategy of providing predictable cash flows to our investors and reinforces our commitment to be a socially responsible organization.”
Cyril Amarchand and Mangaldas, PriceWater Coopers and Mahindra Teqo advised IndiGrid on this transaction. Greenstone Advisors acted as the sell-side advisor on the transaction representing FRV.
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