IndiGrid’s Rs 1,284 cr-rights issue will create more room for acquisitions: CEO

The Rs 1,284 crore- rights issue of India Grid Trust (IndiGrid) will be an enabler for the infrastructure investment fund to scale up acquisitions, a top executive told ET.

IndiGrid is offering 116,695,404 units at Rs 110 in its rights issue that will open on April 6 and close on April 13. The units are being offered on a rights basis to the eligible unitholders in the ratio of one lot for every five lots of 1,701 units, held in the InvIT.

“The rights issue is not to meet the immediate fund requirements. If we acquire what we have already guided, then we will be at 65-67% of leverage, which would leave us with the headroom of acquiring assets worth a couple of thousands. But we are seeing a sizable pipeline of assets, so we want the capital available with us,” Harsh Shah, chief executive officer of IndiGrid, told ET.

The Securities and Exchange Board of India has set a leverage limit of 70% on InvITs.

“The rights issue will bring our consolidated leverage below 60% and it enables us to acquire another Rs 4,000 crore- Rs 5,000 crore of assets whenever we want without raising increment capital,” Shah said.

IndiGrid, which was set up initially as a trust for operational assets of Sterlite Power, plans to step up acquisitions of assets from other infrastructure companies, with focus on power transmission and solar power.

In September, KKR became the sponsor of IndiGrid after the unitholder. Prior to that, in a first of its kind transaction in May 2019, KKR had invested Rs 1,084 crore and GIC Infra Holdings invested Rs 980 crore in the InvIT that was set up by Sterlite Power Transmission.

IndiGrid said it has acquired around Rs 8,300 crore of assets since the last capital raising activity, including assets worth Rs 7,100 crore from Sterlite Power and its first cost-plus transmission asset from Reliance Infrastructure. The InvIT has also announced its foray into the renewable energy sector with the planned acquisition of 138 megawatts of solar assets worth Rs 660 crore.

“In FY21, we acquired more non-Sterlite projects than Sterlite projects. We will be looking at all assets. We have already announced two deals that will close in FY22. We can acquire a project worth a few hundred crores and even a Rs 5,000-crore project,” said Shah.