India Grid Trust (IndiGrid), the country’s first infrastructure investment trust (InvIT), plans to raise about ₹ 4,200 crore to acquire electricity transmission assets, solar power plants and to refinance its existing debt.
The KKR-backed firm will raise this capital through non-convertible debentures (NCDs). Currently, its assets under management (AUM) stood at around ₹ 29,300 crore.
The total capital expenditure for the under-construction/letter of intent projects (LoI) and capacity augmentation at a few of the existing transmission assets is estimated at ₹4,700 crore.
Rating agency ICRA has assigned ‘AAA’ rating to proposed debentures. There is a structured payment mechanism designed to ensure a timely payment of the rated NCDs, as per the terms of the transaction.
Also, if the rating of the NCDs falls to or below AA-, the debenture holders are entitled to ask the issuer for the redemption of NCDs within 30 days.
The InVITs assets consist of 18 diversified operational transmission projects and four under-construction transmission projects across 20 states and two UT. It also includes operational solar power capacity and three under-construction battery storage projects.
At the end of February 2025, IndiGrid’s consolidated debt stood at ₹18,789 crore, with majority of it having bullet repayments. However, factors like the high certainty of cash flows in the power transmission projects, an adequate tail period, the long useful life of the assets act as the strong risk mitigating factors.
IndiGrid’s net debt/AUM was at ₹59 per cent as on February 28, 2025 against the 70 per cent leverage threshold, as per the Securities and Exchange Board of India’s (Sebi’s) investment trust (InvIT) Regulations.
However, the net debt/AUM is expected to go up over the next three years, given the expected increase in debt for funding the under-construction portfolio, the rating agency said.
ICRA expects the net debt/AUM ratio of the Trust to be maintained at around 65 per cent or below on a sustained basis and this will remain a key rating sensitivity.
KKR is the sponsor of the Trust. Separately, KKR also owns a 100 per cent stake in IndiGrid Investment Managers Limited (IIML), the investment manager of IndiGrid. Axis Trustee Services Limited is the trustee for the Trust.
