Singapore-registered Esoteric II Fund Pte Ltd (Esoteric) has proposed to seek induction as the “sponsor” of IndiGrid, India’s first infrastructure investment trust (InvIT) in the power sector.
Esoteric has approached Sterlite Investment Managers Ltd (the investment managers to IndiGrid) to convene a meeting of unitholders of IndiGrid to approve the aforementioned induction.
Esoteric along with its affiliates KKR, is the largest unitholder of IndiGrid. Also KKR owns 60 per cent stake in Sterlite Investment Managers Ltd and according to information available, KKR has contracted to increase this stake to 74 per cent by May 2021. It may also be noted that as of June 30, 2020, Esoteric II Fund Pte Ltd was the single-largest unit holder in IndiGrid with a stake of 23 per cent.
Subsequent to Esoteric’s proposal, the Board of Sterlite Investment Managers Ltd (the investment manager of IndiGrid) on September 8, 2020 considered and approved designating Esoteric as a ‘sponsor’ of IndiGrid and corresponding amendment to Trust Deed subject to approval of unitholders and other statutory governmental, regulatory and corporate approvals, wherever required. The Board further authorized the Investment Manager to issue addendum to the notice of Annual General Meeting (AGM) to seek approval of the unitholders.
The AGM of unitholders of IndiGrid is scheduled to be held on September 28, 2020.
Revival of proposal
It may be mentioned that as of June 30, 2020, the agreement between Esoteric and Sterlite Grid Power Ventures Ltd (the current sponsor of IndiGrid) to transfer SGPVL’s 15 per cent stake in IndiGrid automatically expired. The proposed transaction could not be consummated by the long-stop date, IndiGrid had explained in an investor presentation. In light of this, Esoteric had withdrawn its intent to be designated as sponsor of IndiGrid. With the current communication from Esoteric to Sterlite Investment Managers Ltd, the matter stands revived.
Contours of IndiGrid
- Name of InvIT: India Grid Trust (IndiGrid)
- Sponsor: Sterlite Power Grid Ventures Ltd (SPGVL)
- Investment Manager: Sterlite Investment Managers Ltd (60 per cent stake held by KKR)
- Trustee: Axis Trustee Services Ltd
- Major IndiGrid unitholders: KKR (23 per cent); SPGVL (15 per cent); Others (62 per cent)
Featured photograph for illustration only
