IndiGrid executes definitive agreements to acquire 300 MW (AC) solar assets.

Key Highlights

· IndiGrid has executed share purchase agreement to acquire ReNew Solar Urja Private Limited from ReNew Solar Power Private Limited which operates 300 MW (AC) of solar project.

· IndiGrid’s portfolio will cross 1 GW peak capacity of operating solar assets with this acquisition.

· Acquisition to be done at an Enterprise Value (EV) of INR 1,550 crores; EV including net working capital and cash will be at ~INR 1,650 crores. The acquisition consummation is subject to requisite regulatory approvals.

Mumbai, Monday, 8th January 2024: IndiGrid [BSE: 540565 | NSE: INDIGRID], India’s first listed power sector infrastructure investment trust (InvIT), today announced that it has signed a share purchase agreement with ReNew Solar Power Private Limited (RSPPL) to acquire their asset ReNew Solar Urja Private Limited (RSUPL) at an enterprise valuation of INR 1,550 crores. The 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) & 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.

Operational since December 2021, RSUPL is a 300 MW (AC) solar generation asset located in Jaisalmer, Rajasthan with a 25-year Purchase Power Agreement (PPA) with Solar Energy Corporation of India (SECI) to sell power generated at tariff of INR 2.71 per unit. The project has been operational and revenue generating for ~2 years and the balance term of PPA is ~23 years. It fits well with IndiGrid’s strategy of holding operational and revenue generating assets till maturity.

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.

Commenting on the acquisition, Harsh Shah, Chief Executive Officer, and Whole Time Director of IndiGrid, said, “India is witnessing a steep increase in its power demand to fuel its rapid economic growth. In view of India’s focus on energy transition, we are confident of the strategic value of renewable energy projects in the coming decades. 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 9 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 crores at a leverage threshold of 70% as per SEBI InvIT Regulations.

This 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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