India Grid Trust (IndiGrid), an Indian infrastructure investment trust, is set to acquire five electricity transmission assets in India, worth INR11,500 crores ($1.66 billion) from Sterlite Power.

Of the five transmission assets, two of them – NRSS XXIX and OGPTL are operational for which a share purchase agreement has been signed by the parties. The remaining three assets will be acquired after they enter operations.

Upon completion of the acquisitions, the inter-state power transmission assets under management of IndiGrid will increase to INR17,000 crores ($2.5 billion).

Currently, the Indian infrastructure investment trust, handles a portfolio of six electricity transmission assets with a total network of electric transmission lines spread over 3,361 circuit kilometers in nine states.

The acquisition of the electricity transmission assets of Sterlite Power is expected to considerably grow the portfolio of IndiGrid, which was established by the former in 2016 to own inter-state electric transmission assets in India.

For acquiring the assets from its parent company, IndiGrid has secured investments of INR1084 crores ($157 million) and INR980 crores ($142 million), respectively, from KKR and GIC, which will collectively own a stake of 42% in the former.

KKR has also agreed to become a sponsor of IndiGrid and will buy an additional 15% stake of the latter’s total units from Sterlite Power.

Harsh Shah – CEO of IndiGrid, said: “We welcome KKR, GIC and our other investors and who have showcased their confidence in IndiGrid, and we look forward to benefiting from KKR and Sterlite Power’s expertise and experience in investment and asset management. With this new capital investment, we will reach our goal of INR17,000 crores of assets under management and are well on our way to achieving INR 30,000 crores of assets under management by 2022 while also providing stable and predictable returns to our investors.”

In a separate deal, KKR has agreed to acquire a majority stake in Sterlite Investment Managers, an investment manager owned by Sterlite Power.

All the transactions will be based on meeting of customary closing conditions such as regulatory and unitholder approvals.

David Luboff – Member & Head of Asia Pacific Infrastructure at KKR, said: “Asia Pacific is a core focus for KKR’s global infrastructure strategy, and India is a key market for us in the region given its dynamism, the scale of investment opportunities and its crucial need for capital solutions.

“We’re pleased to have chosen leading infrastructure providers like IndiGrid and Sterlite Power as our first investment behind our Asia Infrastructure strategy, and look forward to supporting IndiGrid’s growth, providing further solutions-oriented opportunities and playing an important role in addressing the infrastructure need.”

  David Luboff, GIC, Harsh Shah, India, India Grid Trust, IndiGrid, KKR, NRSS XXIX, OGPTL, Sterlite Power