MUMBAI, India, Oct 9, 2017 /CNW/ -
- IndiGrid's AUM will increase by 40% post these acquisitions
- Annualized distribution will increase by 4% from INR 11.00 to 11.44 per unit
- The implied yield will increase from 11.6%* to 12.1%*
*based on INR 94.93/ unit closing price of 6 October 2017
IndiGrid, India's first Infrastructure Investment Trust in the power sector, has approved the acquisition of three power transmission assets from its sponsor Sterlite Power Grid Ventures Ltd at a value of INR 14.9 billion. These acquisitions result in a 40% increase in AUM, from INR 38 billion to INR 53 billion.
The three assets consists of 5 transmission lines aggregating 1,425 ckms thus increasing its total portfolio to 13 transmission lines and 2 substations across 8 states.
These inter-state assets were awarded on perpetual basis on a Build, Own, Operate and Maintain model through competitive bidding. They have a long residual contractual life of about 34 years and are operating under the Point of Connection mechanism in India thereby significantly de-risking the revenues.
Commenting on the acquisition, Mr. Pratik Agarwal, Chief Executive Officer, IndiGrid, said, "These three acquisitions reaffirm our strong commitment to growing the IndiGrid platform through accretive transactions of operational power transmission assets, which have long-term cash flows and low counterparty risks. We will continue to pursue all such growth opportunities, including third party assets."
The proposed acquisition will be funded entirely through debt in order to utilize the available headroom. These assets have the same characteristics as the existing assets of IndiGrid which is AAA rated. This acquisition will increase IndiGrid's debt to assets ratio from 26% to nearly 49%.
The transaction is subject to customary regulatory and unitholders approvals and is expected to be completed in Q1 CY18.
- RAPP Transmission Company Limited: One 400 KV double circuit interstate transmission line of 403 circuit kms in the states of Rajasthan and Madhya Pradesh. The line was commissioned in February 2016.
- Purulia & Kharagpur Transmission Company Limited: Two 400 kV interstate transmission lines of 545 circuit kms in the states of West Bengal and Jharkhand. One line was commissioned in June 2016 and the other line in January 2017.
- Maheshwaram Transmission Limited: Two 400 kV interstate transmission lines of 477 circuit kms in the state of Telangana. One line was commissioned in September 2017 and other line is expected to commission in October 2017.
IndiGrid is the first Infrastructure Investment Trust ("InvIT") established to own inter-state power transmission assets in India. IndiGrid owns 10 independent revenue generating elements, including 8 transmission lines of 1,936 ckms and 2 substations of 6,000 MVA capacity. InvITs are investment vehicles to own predominantly operating infrastructure assets in India and are akin to Real Estate Investment Trusts ("ReIT"), Yieldcos and master limited partnerships ("MLP"). For more details, please visit http://www.indigrid.co.in.