The board of the investment manager of IndiGrid, India’s first InvIT in the power sector, has approved the acquisition of East-North Interconnection Company Ltd. (ENICL), for ₹1,020 crore.
ENICL is part of the Inter State Transmission Scheme (ISTS) network and consists of two 400 KV transmission lines with a total of about 900 circuit km across Assam, Bihar and West Bengal.
This acquisition would increase the assets under management of IndiGrid by 10% to ₹12,100 crore.
It is a strategic asset which is crucial for power exchange across the north-eastern and eastern regions of India. IndiGrid had signed an extension of Right of First Offer deed with Sterlite Power for ENICL as disclosed in the Offer Document dated May 04, 2019.
IndiGrid is leveraged at 45% net debt-to-AUM ratio. Post the acquisition, IndiGrid’s net debt-AUM ratio will continue to be below 49%. This acquisition will be funded by internal accruals, proceeds from the preference issue done in May 2019 and new debt. The acquisition is expected to close by March 2020.
IndiGrid’s portfolio will increase to nine power transmission projects with a total network of 20 power transmission lines that span more than 5,800 circuit km across 13 Indian States, post this acquisition.
“IndiGrid has another ₹6,500 crore pipeline of transmission projects under the framework agreement with Sterlite Power to reach an AUM of ₹18,000 crore over the next two years,” said Harsh Shah, CEO, IndiGrid.
“We are committed to grow IndiGrid... with long-term stable cash flows and low counter-party risks to achieve ₹30,000 crore of AUM by 2022.” IndiGrid had earlier raised ₹2,510 crore by way of preferential issue which was subscribed by KKR and GIC, among others.
