IndiGrid signs the largest power transmission deal with Sterlite Power AUM to leapfrog to over INR 200 bn.
Mumbai, March 6, 2021: India Grid Trust (IndiGrid), India’s first power infrastructure investment trust (InvIT), has signed a share purchase agreement to acquire NER-II Transmission Limited (NER-II), from Sterlite Power as part of the Framework Agreement. The indicative value of the acquisition is ~INR 46.25 bn (subject to closing adjustments) and would boost IndiGrid’s AUM by 34% to over ~INR 200 bn (USD 2.8 bn). Post completion, the platform’s asset portfolio would consist of 13 power transmission projects, with a total network of 38 power transmission lines and 11 substations extending over ~7,570 circuit kilometres and 13,350 MVA in 17 Indian states and 1 Union Territory.
NER-II is part of Inter State Transmission Scheme (ISTS) network, and was awarded on a Build, Own, Operate, Maintain (BOOM) basis with a contractual period of 35 years. The project has 11 elements including two substations of 1,260 MVA capacity and four transmission lines extending over ~830 circuit kilometres. The asset spans across Assam, Arunachal Pradesh and Tripura and is of strategic importance for the delivery of power in one of the toughest regions in the country. This project will strengthen the power transmission network in the North Eastern States and address the of transmission, sub-transmission, and distribution system needs of the region.
IndiGrid had signed a framework agreement in April 2019 with Sterlite Power for acquisition of NER-II upon commissioning. This transaction is expected to be consummated during Q4 FY21, subject to unitholders’ approval, regulatory approvals, and other customary closing adjustments. The acquisition will be funded through a combination of internal accruals, debt, equity proceeds from the preference issue done in May 2019 and forthcoming rights issue. Post this acquisition, the net debt/AUM would stand at ~64%.
