Exclusive: Indigrid sponsor Sterlite launches unit sale to raise up to Rs 850 crore

Private power transmission company Sterlite Power Grid Ventures Limited, the sponsor of infrastructure investment trust (InvIT) India Grid Trust (IndiGrid) has launched a sale of units to raise Rs 825 crore to Rs 850 crore, multiple sources with knowledge of the matter told Moneycontrol.

Private equity firm KKR and GIC also back IndiGrid, the country’s only publicly listed InvIT in the power sector.

“The deal has been launched and it's a secondary sale to generate additional liquidity. It represents around 14 percent of the total units of IndiGrid,” said one of the individuals cited above.

“The sale of units has been priced at a discount of 1.26 percent to 3.25 percent of today’s closing price of Rs 100.26. Citi & Edelweiss are the brokers/advisors to the deal,” added a second person.

A third individual confirmed the same.

All the individuals spoke to Moneycontrol on condition of anonymity. Moneycontrol could not immediately contact IndiGrid, KKR, Edelweiss and Citi for comments.

Recently, IndiGrid announced that KKR would no longer acquire an additional stake and be its co-sponsor as per a 2019 agreement which had expired.  KKR currently owns 23 percent of Indigrid.

“There was an agreement between Esoteric II, which is an affiliate of KKR and SPGVL to transact on 15 percent of IndiGrid units. This agreement got automatically expired in July 2020 on the long stop date as the transaction could not be consummated by that date. In light of the above, Esoteric II has also withdrawn its intent to be designated as a sponsor of IndiGrid,” the management elaborated in the Q1FY21 conference call.

IndiGrid owns nine operating projects consisting of 20 transmission lines with more than 5,800 km length and 4 substations with 7,735 MVA transformation capacity. It has assets under management (AUM) worth $1.61 billion. IndiGrid is managed by Sterlite Investment Managers Limited which is majority owned by KKR.

IndiGrid’s Q1 FY21 EBITDA at Rs 3, 290 mn grew 74 percent YoY on the back of steady acquisitions while its revenue at Rs 3,611 mn rose by 78 percent during the same period.  Its distribution payout was at Rs 3.00 per unit despite COVID-19- related uncertainties, the firm said in its results update.  Its Net Debt/AUM at 50 percent as of June 30 was significantly below the 70 percent cap as per SEBI InvIT regulations, it added.