KKR & Co-backed India Grid Trust (IndiGrid), the country’s only publicly listed infrastructure investment trust (InvIT) in the power sector, said on Monday it will acquire a 74% stake in Parbati Koldam Transmission Co Ltd from Anil Ambani group’s Reliance Infrastructure Ltd.
Although no deal value was explicitly stated, IndiGrid said in its exchange filing that the implied enterprise value of the transmission asset was around Rs 900 crore ($121.6 million). At this price, an acquisition of 74% of shares should translate into a deal value of Rs 666 crore ($90 million).
Parbati, a joint venture between Reliance Infrastructure and the government-owned PowerGrid Corporation of India Ltd, was set up in September 2002 and started in June 2015.
Parbati operates 458 circuit kilometres of transmission lines from the Parbati-II HEP (hydro-electric power) set up by NHPC Ltd and Koldam HEP, operated by NTPC Ltd.
Parbati, which had a total revenue of around Rs 209 crore in 2018-19, has a net worth of a little over Rs 440 crore.
The last time IndiGrid had acquired a transmission asset was in June, when it bought a 100% stake in a Haryana-based company owned by Kalpataru Power Transmission Ltd and Techno Electric and Engineering Co. Ltd for Rs 310 crore (about $40 million).
That buy was IndiGrid’s second deal with Techno Electric and the tenth since the InvIT listed on the stock exchanges in 2017.
Earlier in August 2018, IndiGrid had acquired Patran Transmisison Co Ltd from Techno for Rs 232 crore.
In January this year, IndiGrid announced the acquisition of a project for Rs 1,200 crore from its sponsor Sterlite Power Grid Ventures Ltd. This was part of a planned acquisition of Rs 11,500 crore of assets from Sterlite Power.
IndiGrid’s decision to acquire its newest transmission asset comes a little under three months after KKR made an about-turn of sorts, as it revived a plan to become the sponsor of the InvIT barely a month after having stepped back.
KKR, through an affiliate, wanted to be inducted as a sponsor of the InvIT but without purchasing any additional stake in IndiGrid as was its original plan last year, a VCCircle report, citing regulatory filings, had said.
The PE firm had first invested in IndiGrid last year. At the time, it had agreed to buy 22% of units of the InvIT with an option to purchase 15% more from the original sponsor, Sterlite Grid Power Ventures Pvt. Ltd.
After KKR scrapped its deal, Sterlite Power sold the 15% units on the open market for a higher price last month. Sterlite had pledged these units to L&T Infrastructure Finance Ltd against a Rs 640 crore loan. It sold the units for over Rs 850 crore.
The InvIT was set up in 2016 by Sterlite Power Transmission Ltd under unit Sterlite Power Grid. It was listed the following year and now manages assets worth Rs 12,300 crore after acquiring an asset in Haryana earlier this year.
Eight of the 10 power transmission assets that IndiGrid manages are from Sterlite Power.
Meanwhile, as a recent VCCircle analysis showed, Sterlite Power Transmission has been plagued by high debt and project delays. The company recorded losses in 2015-16 and 2016-17, turned a corner the following year and slipped back into the red the year after, the analysis showed.