IndiGrid InvIT To Raise Rs 1,284 Crore Through Rights Issue
India Grid Trust, an infrastructure investment trust, plans to raise Rs 1,283.65 crore through a rights issue.
It will offer as many as 11.67 crore units at Rs 110 apiece, according to an exchange filing. The issue will open on April 6 and close on April 13.
The investment manager of IndiGrid is majority owned by KKR. “The sponsors of IndiGrid have confirmed they will subscribe to the full extent of their aggregate rights entitlement, as applicable, in accordance with the rights issue guidelines. In addition, the KKR sponsor will subscribe to all of the unsubscribed portion in the issue subject to compliance with the minimum public unitholding requirements and as per the basis of allotment mentioned in letter of offer,” the filing said.
The issue price, Harsh Shah, chief executive officer at IndiGrid, said is at about a 20% discount to March 24 market price. “We have given rights to our existing investors to participate at 20% discount. It’s an opportunity and incentive for our existing investors,” Shah told BloombergQuint over the phone. “The proceeds of the rights issue is going to go towards retiring some debt as well as acquisition of assets that we have just announced called NER-II.”
Earlier this month, IndiGrid had announced the acquisition of NER-II Transmission Ltd. from Sterlite Power as part of a framework agreement. The indicative value of the acquisition, according to a media statement, is Rs 4,625 crore.
NER-II is part of an inter-state transmission scheme network, and was awarded on a build, own, operate, maintain 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 kilometers, the statement said. “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,” it said.
According to Shah, with the NER acquisition and the capital-raising, the company would be nearly at 59% debt to asset under management. “Market regulator SEBI allows up to 70% debt to AUM, so we still have 10-11% headroom for growth,” he said.
After the NER-II acquisition, the platform’s asset portfolio would consist of 13 power transmission projects, with a total network of 38 power transmission lines and 11 substations extending over 7,570 circuit kilometers and 13,350 MVA in 17 Indian states and one union territory.