Private equity firm KKR backed infrastructure investment trust India Grid Trust, or IndiGrid, has signed an agreement to acquire a power transmission asset at Jhajjar in Haryana for Rs 310 crore from current owners Kalpataru Power Transmission and Techno Electric & Engineering Company.
IndiGrid aims to scale up its power transmission assets under management (AUM) to Rs 30,000 crore by 2022 and has plans to diversify into the solar power sector.
“This transaction is a major milestone and example of an accretive capital allocation process that KPTL has employed over the past several years. We are also progressing well on sale of other T&D assets and expect to close the same in FY21,” Manish Mohnot, managing director and CEO, KPTL said.
An executive from IndiGrid executive, on the condition on anonymity told ET, “IndiGrid is moving closer to the vision of having Rs 30,000 crore AUM. It already has Rs 18,000 crore of assets in the pipeline and Rs 12,000 crore have been acquired already. Third-party deals like these will add to that asset base and we aim to diversify into solar power to have 15-20% of our portfolio from that sector eventually.”
This will be the second acquisition by IndiGrid from a company other than its original sponsor Sterlite Power. In May 2019, IndiGrid received investments from KKR and GIC, following which IndiGrid is managed by Sterlite Investment Managers which is majority owned by KKR.
The pact to buy Jhajjar KT Transco Private is subject to approvals and marks the infrastructure investment trust’s first such transaction with Kalpataru Power Transmission. It is the second transaction with Techno Electric & Engineering Company, after acquisition of Patran Transmission Company Limited in August 2018.
“We will continue to acquire operating assets and for that we are creating partnerships with Kalpataru Power and Techno Electric who actively bid for developing power transmission projects,” said the IndiGrid executive.
Jhajjar KT Transco is an operational intra-state asset under the ‘design-build-finance-operate and transfer’ model, which evacuates power from the 1,320 megawatt thermal power plant in Jhajjar. The project has a contract for 25 years which can be extended by another 10 years. It has been operational for eight years, with a steady collection track record and receivable cycle of less than a month.
IndiGrid currently has nine operating projects, which own 20 transmission lines with 5,800 circuit km length and four substations with 7,735 MVA capacity, with total AUM of Rs 12,100 crore.
Source: Economic Times