IndiGrid Finalizes Deals to Procure 300 MW Solar Assets

IndiGrid, India’s inaugural listed power sector infrastructure investment trust (InvIT), has officially inked a share purchase agreement with ReNew Solar Power Pvt Ltd (RSPPL) for the procurement of their asset, ReNew Solar Urja Pvt Ltd (RSUPL). The acquisition, valued at an enterprise worth of INR 1,550 crores, encompasses net working capital and cash, totaling around INR 1,650 crores. Additionally, an earn-out linked to Change-In-Law (CIL) regarding Basic Customs Duty (BCD) & GST will be disbursed to RSPPL upon the realization of the initial payment.

As per the definitive agreements and the Power Purchase Agreement (PPA), IndiGrid is set to acquire 100% ownership and managerial control of RSUPL, subject to regulatory approvals. Operational since December 2021, RSUPL stands as a 300 MW (AC) solar generation asset situated in Jaisalmer, Rajasthan. It holds a 25-year Purchase Power Agreement (PPA) with Solar Energy Corporation of India (SECI) to sell electricity generated at a tariff rate of INR 2.71 per unit. With around 23 years remaining on the PPA term, the project aligns seamlessly with IndiGrid’s focus on holding operational and revenue-generating assets till maturity.

This acquisition signifies a strategic addition to IndiGrid’s portfolio, positioning RSUPL as the largest capacity project at a single site for the company. Upon completion, IndiGrid’s operational solar capacity will exceed 1 GW, elevating its total Assets Under Management (AUM) to approximately INR 285 billion.

Harsh Shah, Chief Executive Officer and Whole Time Director of IndiGrid, expressed confidence in the strategic value of renewable energy projects amidst India’s surging power demand and emphasis on energy transition. Shah highlighted RSUPL’s quality as a solar generation asset located in a high-irradiation region, aligning with the company’s long-term growth strategy and cash-flow objectives.

IndiGrid’s fiscal progress includes equity fundraising of approximately INR 1,050 crores during the initial 9 months of this financial year through preferential allotment and institutional placement, paving the way for a growth potential of INR 6,000 to 7,000 crores within the 70% leverage threshold set by SEBI InvIT Regulations.

The acquisition will be funded through a blend of equity, internal accruals, and debt, resulting in a net debt/AUM ratio of approximately 62.5%, allowing substantial room for future growth.