India Grid Trust (IndiGrid or the InvIT) has closed a preference unit issuance worth $363m, with KKR and GIC investing $157m and $142m, respectively, to jointly own 42% of IndiGrid’s outstanding units.
IndiGrid said that the KKR has also applied to become its sponsor, with an aim to acquire an additional 15% of IndiGrid’s total units from Sterlite Power. After the completion of the transactions, KKR and GIC collective ownership becomes approximately 57% of IndiGrid’s outstanding units.
KKR intends to acquire an additional majority stake in Sterlite Investment managers, the investment manager owned by Sterlite Power, which has established IndiGrid in 2016 and remains a sponsor and project manager for IndiGrid.
IndiGrid CEO Harsh Shah 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.”
IndiGrid is expected to buy five electricity transmission assets from Sterlite Power for $1.66bn, and a share purchase agreement has been signed for two operational transmission assets – NRSS XXIX and OGPTL, while other three additional assets are expected to be purchased once they become operational.
IndiGrid claims that it is an infrastructure investment trust owning inter-state power transmission assets in India and its assets under management are expected to raise to $2.5bn, following the completion of the proposed acquisitions.
The InvIT manages a portfolio of six electricity transmission assets with a total network of power transmission lines that span more than 3,361 circuit kilometers across nine Indian states. The purchase of Sterlite Power’s electricity transmission assets will significantly expand IndiGrid’s portfolio and better enable it to address India’s infrastructure needs.
KKR India CEO Sanjay Nayar said: “India holds a tremendous opportunity for infrastructure investment, in the trillions of dollars in the coming decades. We believe addressing the country’s infrastructure needs is a priority for the government, industries and communities across India alike, and we are excited to make our foray into this market and contribute as a solutions provider.
IndiGrid is a well-managed infrastructure platform and Sterlite Power is a world-class asset manager. We look forward to working together with these teams to grow this platform and support infrastructure development in the coming years.”
The present transaction marks KKR’s first investment through its Asia Pacific Infrastructure strategy.