IndiGrid, India’s first listed power sector infrastructure investment trust (InvIT), has signed a share purchase agreement with ReNew Solar Power Pvt Ltd (RSPPL) to acquire their 300 MW (AC) solar power project in Rajasthan, ReNew Solar Urja Pvt Ltd (RSUPL).
IndiGrid said the total enterprise valuation, including net working capital and cash, will be INR 1,650 crore. Additionally, there will be an earn-out related to Change-In-Law (CIL) in basic customs duty (BCD) and goods and services tax (GST), to be paid to RSPPL as and when the first payment is realized.
In line with the terms of the definitive agreements and the power purchase agreement (PPA), along with the lock-in restrictions therein, IndiGrid will acquire 100% shareholding and management control of RSUPL, subject to requisite regulatory approvals.
RSUPL, located in Jaisalmer, has been operational since December 2021 and benefits from a 25-year PPA with Solar Energy Corp. of India (SECI) to sell power generated at a tariff of INR 2.71/kWh. In 2022-23, the solar project delivered a net PLF of 27.42%.
IndiGrid said the acquisition of this project fits well with their strategy of holding operational and revenue generating assets till maturity. For ReNew, the sale is aligned with its strategy to enhance shareholder value through capital recycling and investment into higher-return opportunities. After the transfer of the outstanding debt to the buyer, the transaction will result in a cash inflow of approximately $82 million, including change-in-law proceeds for ReNew.
RSUPL is a strategic addition to IndiGrid’s portfolio as it would be the largest capacity project located at a single site for the company. With this acquisition, IndiGrid’s peak solar capacity will cross 1 GW of operating solar assets and the total assets under management (AUM) of INR 285 billion.
Harsh Shah, chief executive officer, and whole time director of IndiGrid, said, “RSUPL is a high-quality solar generation asset located in one of the highest irradiation regions of India with reasonable operating track record. In-line with our strategic focus, RSUPL will help us ensure sustainable growth of our portfolio and aid in long-term cash-flow addition.”
During the first nine months of this fiscal, IndiGrid has done equity fund raising to the tune of INR 1,050 crore through preferential allotment and institutional placement. This has paved growth headroom for the company of INR 6,000 – 7,000 crore at a leverage threshold of 70% as per SEBI InvIT Regulations.
IndiGrid stated, the [300 MW asset] acquisition will be funded through a combination of equity, internal accruals, and debt. The net debt/AUM will be 62.5% post this acquisition, leaving adequate headroom for future growth
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