FCC

IndiGrid to acquire Rs 115 billion transmission assets from Sterlite Power

2019-05-16

The infrastructure investment trust (InvIT), India Grid Trust (IndiGrid) will be reportedly acquiring five electricity transmission assets worth Rs 115 billion from Sterlite Power.

The news comes after KKR and GIC announced fund infusion into IndiGrid. Reportedly, as a part of the deal KKR and GIC have invested Rs 10.84 billion and Rs 9.8 billion, respectively, to collectively acquire 42 per cent of IndiGrid?s outstanding units.

Backed by Sterlite Power Grid Ventures, IndiGrid was established in 2016 in order to own inter-state power transmission assets in India. It is expected to issue preference shares worth Rs 25.14 billion to acquire the power transmission assets from Sterlite.

This further marks KKR?s first infrastructure investment in Asia Pacific. With this deal, KKR has reportedly applied to become a sponsor of IndiGrid and is in plans to acquire an additional 15 per cent of IndiGrid?s total units from Sterlite Power. However, post transaction closure, KKR and GIC are expected to own nearly 57 per cent of IndiGrid?s outstanding units.

The new capital investment is expected to help IndiGrid achieve the goal of Rs 170 billion of assets under management. Furthermore, reports suggest that it also plans to achieve Rs 300 billion of assets under management (AUM) by 2022.

In a separate transaction, KKR will reportedly acquire a majority shareholding in Sterlite Investment Managers, the investment manager owned by Sterlite Power. However, Sterlite Power will remain a sponsor and Project Manager of IndiGrid.