India Grid Trust, an infrastructure investment trust (InvIT) sponsored by power transmission company Sterlite Power Grid Ventures Ltd, has signed a pact to take a 46% stake in a transmission asset of Kolkata-based Techno Electric & Engineering Company Ltd.
The trust will invest Rs 232 crore ($36 million) in cash for the stake in Patran Transmission Company Ltd, it said in a stock-exchange filing.
The investment is in line with India Grid Trust’s growth strategy, it said. The deal is likely to be closed in the April-June quarter, it added.
Separately, India Grid has completed the acquisition of three power transmission assets worth Rs 1,410 crore ($218.6 million) from sponsor Sterlite Power Grid.
The company said both these acquisitions are highly accretive and will increase its internal rate of return to 11% at current prices.
Pratik Agarwal, chief executive officer at India Grid Trust, said the acquisitions are in line with the company’s target of reaching Rs 30,000 crore of assets under management. He added that India Grid will continue to acquire assets from both its sponsor and third parties.
India Grid Trust was incorporated in October 2016 and owns inter-state power transmission assets. It was the second InvIT to float an initial public offering, after IRB InvIT Fund. Its portfolio includes 13 transmission lines and two substations across eight states in India. It manages assets worth around Rs 5,300 crore.
Incorporated in 2012, Patran Transmission comprises a substation at Patran in Punjab and transmission lines that connect Kaithal in Haryana and Patiala in Punjab. Techno Electric had won the project through a bidding process under a build-own-operate-maintain model. The project was commissioned in November 2016 and has a residual contractual life of 33 years.
The three assets India Grid bought from Sterlite Power Grid are RAPP Transmission Company Ltd, Purulia and Kharagpur Transmission Company Ltd and Maheshwaram Transmission Ltd. These assets are spread across Rajasthan, Madhya Pradesh, West Bengal, Jharkhand and Telangana with five transmission lines aggregating to 1,425 circuit km. They have a residual contractual life of about 34 years.