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IndiGrid acquires Sterlite Power’s NER-II at Rs 4.6K cr

India’s largest transmission asset acquisition

IndiGrid is in a steadfast position to capitalize on the growth opportunities and become the most admired yield vehicle in Asia, Harsh Shah, Chief Executive Officer, of the InvIT said.

MUMBAI, Mar 27 (The CONNECT) - India Grid Trust, India’s first and the largest power sector infrastructure investment trust (InvIT), has completed the largest transmission project deal by acquiring NER-II Transmission Limited from Sterlite Power at an enterprise value of INR 4,625 Cr.

With this acquisition, IndiGrid’s AUM has increased by 34% to INR 20,000 Cr (USD 2.70 Bn). The platform’s asset portfolio now consists of 13 power transmission projects, with a total network of 38 power transmission lines and 11 substations extending over 7,570 circuit kilometers & 13,350 MVA in 17 Indian states and 1 Union Territory.

The acquisition of NER-II was envisaged as part of the Framework Agreement signed with Sterlite Power in April 2019. The Investment Manager of IndiGrid had signed a definitive share purchase agreement for the acquisition of NER-II on March 5, 2021. Later, the unitholders’ approved the transaction unanimously with 100% of the  votes cast in favour of the acquisition in the Extra-Ordinary General Meeting held on March 19, 2021.

NER-II is part of Inter State Transmission Scheme (ISTS) network, and was awarded on a Build, Own, Operate, Maintain (BOOM) basis with a contractual period of 35 years. The project has 11 elements including two substations of 1,260 MVA capacity and four transmission lines extending over 830 circuit kilometers. The asset spans across Assam, Arunachal Pradesh and Tripura and is of strategic importance for the delivery of power in one of the toughest regions in the country. This project will strengthen the power transmission network in the North Eastern States and address the of transmission, sub-transmission, and distribution system needs of the region.

Commenting on the acquisition, Harsh Shah, Chief Executive Officer of IndiGrid, said FY21 has been a transformational year for IndiGrid with INR 7,500 Cr acquisitions across Inter-State transmission, Intra-State transmission, and regulated tariff transmission projects as well as the first solar project. These accretive acquisitions have augmented the IndiGrid’s ability to grow DPU which is evident in our recent increase to INR 12.40 per annum.

“Going forward, with a robust acquisition pipeline and proposed equity infusion via Rights Issue, IndiGrid is in a steadfast position to capitalize on the growth opportunities and become the most admired yield vehicle in Asia,” Shah said.

Pratik Agarwal, Managing Director, Sterlite Power, said, “This marks our tenth successful asset transfer, in under 4 years. This mega project will bring reliable power to 5.3 Crore people in India’s north east region. The transaction is another validation of our pioneering equity recycling model and our ability to garner tremendous investor interest in our transmission assets.”

Cyril Amarchand and Mangaldas, PriceWater Coopers, L&T-S&L and J. Sagar Associates advised IndiGrid on this transaction. A vote of thanks to our lenders ie Standard Chartered Bank, Union Bank, ICICI Bank, Bank of Maharashtra, Axis Bank Limited, Federal Bank Limited for supporting such a large transaction and showing confidence in IndiGrid’s growth potential.

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