India Grid Trust (IndiGrid) announced that it has completed the acquisition with 100 per cent holding and economic interest in Khargone Transmission Ltd (KTL) from Sterlite Power Transmission Ltd.
IndiGrid and Sterlite Power had signed the binding share purchase agreement for the acquisition on January 21, 2023 and IndiGrid received its unitholders’ approval on 23rd February 23, 2023.
KTL is IndiGrid’s fifteenth accerative transmission asset acquisition since listing in 2017
Impact on portfolio
Acquired at an enterprise value of around Rs.15 billion, the addition of KTL to the portfolio will take IndiGrid’s Assets Under Management (AUM) to Rs.227 billion and the company’s overall asset base to approximately 8,416 ckm of transmission lines and 17,550 MVA of transformation capacity.
Funding
The acquisition was funded through a combination of equity, internal accruals, and debt. The net debt/AUM stands at around 61 per cent post this acquisition, providing adequate headroom for future growth against the 70 per cent leverage threshold as per SEBI InvIT Regulations, IndiGrid said.
In operation since 2021
Khargone Transmission Ltd is an interstate transmission system TBCB project and has been operating commercially since December 2021. It is a build-own-operate-maintain (BOOM)-based project and has a remaining Transmission Service Agreement (TSA) life of around 32 years with a levelized tariff of Rs.1,591 million.
The project has six elements consisting of one pooling stations at 765/400kV level of 3,000 MVA capacity and four transmission lines extending over 626 ckm. The asset spans across Madhya Pradesh and Maharashtra and terminates in one end at the Dhule substation of Bhopal Dhule Transmission Company Ltd (BDTCL), which has been IndiGrid’s subsidiary since its IPO.
The project is of strategic importance for evacuation of 1,320-mw of power generated by NTPC’s Khargone super thermal power plant in Madhya Pradesh to the 765kV Khandwa substation to further distribute it downstream and will strengthen the power transmission network in the Central and Western India.
Solidifying our position
Commenting on the acquisition, Harsh Shah, Chief Executive Officer of IndiGrid, said,” The acquisition of KTL is in line with IndiGrid’s strategy to drive growth by adding more value accretive assets to our portfolio and further solidifies our position as a leading electric utility and a sustainable yield platform. Due to KTL’s geographical proximity to our existing BDTCL project, this acquisition provides us an operational leverage and will help us drive operational efficiency.”
