IndiGrid has completed the acquisition of NER-II Transmission Ltd from Sterlite Power at an enterprise value of Rs 4,625 crore. India Grid Trust (IndiGrid) is the country’s first and the largest power sector Infrastructure Investment Trust (InvIT). IndiGrid completed the largest transmission project deal by acquiring NER-II Transmission Ltd at an enterprise value of Rs 4,625 crore, the company said in a statement. With this acquisition, IndiGrid’s AUM (Asset Under Management) has increased 34% to Rs 20,000 crore.
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 kilometres and 13,350 MVA (MegaVolt Amperes) in 17 states and one Union Territory. The acquisition of NER-II was envisaged as a part of the framework agreement signed with Sterlite Power in April 2019.
Investment Managers Ltd of IndiGrid had signed a definitive share purchase agreement for the acquisition of NER-II on March 5, 2021. Pursuant to this, the unitholders approved the transaction unanimously with 100% of the votes cast in favour of the acquisition in the Extra-Ordinary General Meeting (EGM) held on March 19, 2021.
NER-II is a part of the 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 kilometres.
The assets span 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 northeastern states and address the transmission, sub-transmission, and distribution system needs of the region.
IndiGrid CEO Harsh Shah said the company has concluded one of the largest acquisitions in the Indian power transmission landscape within a short period of time from signing definitive agreements.
FY21 has been a transformational year for IndiGrid with Rs 7,500 crore acquisitions across inter-state transmission, intra-state transmission, and regulated tariff transmission projects as well as our first solar project, he added.
According to him, these accretive acquisitions have augmented the ability to grow distribution per unit, which is evident in the recent increase to Rs 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 capitalise on the growth opportunities and become the most admired yield vehicle in Asia, Shah said.
“We are delighted to have successfully closed the sale of NER-II to India Grid Trust. This marks our 10th successful asset transfer, in under four years. This mega project will bring reliable power to 5.3 crore people in India’s northeast region. The transaction is another validation of our pioneering equity recycling model and our ability to garner tremendous investor interest in our transmission assets,” Sterlite Power Managing Director Pratik Agarwal said.
