Indian Economy News

IndiGrid InvIT to buy Jhajjar KT Transco for Rs 310 crore

A listed infrastructure investment trust (InvIT) for power transmission lines, IndiGrid, has executed share purchase agreement for the buyout of power transmission line operator Jhajjar KT Transco Pvt Ltd, for about Rs 310 crore (US$ 43.98 million), from Kalpataru Power Transmission Ltd and Techno Electric & Engineering Company Ltd.

According to company’s statement, the transaction is expected to be completed over the next few months.

The deal is expected to boost IndiGrid’s assets under management (AUM) to about Rs 12,300 crore (US$ 1.74 billion) as it is funded through a mix of debt and internal accruals. The portfolio of the company is expected to increase to 10 power transmission projects with a total network of 23 power transmission lines that span over 6,000 circuit kilometres across 14 states with this deal.

“This acquisition is in line with our strategy to acquire accretive operational assets with long term and stable cash flows thereby growing returns for unitholders," said Mr Harsh Shah, chief executive officer of IndiGrid.

“Apart from third party opportunities available in the Indian transmission sector, IndiGrid has another Rs 6,500 crore (US$ 922.12 million) pipeline of transmission projects under the framework agreement with Sterlite Power providing visibility of about Rs 18,000 crore ( US$ 2.55 billion) of AUM over the next two years," he added.

A special purpose vehicle owned by Kalpataru Power and Techno Electric, Jhajjar KT consists of three 400 kilo-volt (kV) transmission lines spread across 103 kilometres (km) in Haryana and two sub-stations with a transformation capacity of 830 mega volt ampere (MVA). It operates strategic assets for power distribution companies in Haryana, which were awarded on a ‘design build finance operates and transfer’ basis with a contractual period of 25 years and a provision of further 10-year extension. Till now, the project has been operational for eight years and has a receivable cycle of less than a month. Moreover, it also operates the main evacuation transmission system from the 1,320 mega-watt thermal power plant in Jhajjar.

This is the second such deal of IndiGrid with the Kolkata-based Techno Electric, an engineering, procurement, construction (EPC) firm in power sector. In August 2018, IndiGrid had acquired Patran Transmission Co Ltd, which consists of 400/ 220 kV substation having 1000 MVA transformation capacity with 14 bays in Patran, Punjab and LILO (line in line out) of both circuits of Patiala-Kaithal 400 kV double circuit triple snow bird line of 5 km at Patran.

The legal advisor to IndiGrid for this transaction was Cyril Amarchand and Mangaldas.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.