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KKR, GIC-backed IndiGrid to buy power transmission asset from sponsor Sterlite
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India’s first power transmission infrastructure trust IndiGrid said it has agreed to acquire from its sponsor Sterlite Power Grid Ventures Ltd a project for Rs 1,020 crore ($143 million at current exchange rate).

The move comes as part of a planned acquisition of Rs 11,500 crore of assets from Sterlite Power. Late last year, the trust had told VCCircle that of these, Rs 5,000 crore worth of assets had already been acquired.

The target purchase, East North Interconnection Co. Ltd, which sends power from north-east and east to north, would bump up IndiGrid’s assets under control by 10% to Rs 12,100 crore. It will also increase IndiGrid’s portfolio to nine power transmission projects with a total network of 20 power lines spanning more than 5,800 circuit kilometres across 13 Indian states.

Trust chief executive Harsh Shah had told VCCircle late last year that he hoped the vehicle to have assets under management of up to Rs 18,000 crore in the next couple of years. 

“This acquisition will be funded by internal accruals, proceeds from a preference issue in May 2019 and new debt. The acquisition is expected during the fourth quarter of 2019-20,” IndiGrid said in a statement. 

East North Interconnection Co. Ltd consists of two 400 kilo volt transmission lines with a total 900 circuit kilometres across Assam, Bihar and West Bengal. 

Sterlite Power Grid Ventures, which will sell the project, had created IndiGrid in 2016 to run its asset operations. More than two years after its market debut, the trust still hopes to gain massive popularity among investors.

Last year, global alternatives giant KKR & Co. had announced that it was taking a 42% controlling stake in IndiGrid (along with an investment from Singaporean sovereign wealth fund GIC) and had acquired a 60% stake in the managing entity, Sterlite Investment Managers, which was to be upped to 74% in two years. KKR has also applied to become the trust’s sponsor and wishes to buy the entire stake of IndiGrid’s current sponsor, Sterlite Power Grid Ventures.

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