IndiGrid expands solar portfolio, acquires 300 MW RSUPL in Rajasthan for INR 1,650 crores

Major Solar Asset Acquisition in Rajasthan Boosts Renewable Energy Portfolio, Strengthening India’s Power Infrastructure.

IndiGrid, India’s inaugural publicly listed power sector infrastructure investment trust (InvIT), declared today the signing of a share purchase agreement with ReNew Solar Power Private Limited (RSPPL) for the acquisition of their asset, ReNew Solar Urja Private Limited (RSUPL), at an enterprise valuation of INR 1,550 crores. The comprehensive valuation, inclusive of net working capital and cash, is approximately INR 1,650 crores. Additionally, there will be an earn-out linked to Change-In-Law (CIL) in Basic Customs Duty (BCD) & GST, payable to RSPPL upon realization of the initial payment. Adhering to the terms specified in the definitive agreements and the Power Purchase Agreement (PPA), along with the associated lock-in restrictions, IndiGrid will procure a 100 percent shareholding and assume management control of RSUPL, subject to requisite regulatory approvals.

Commencing operations in December 2021, RSUPL stands as a 300 MW (AC) solar generation asset situated in Jaisalmer, Rajasthan, boasting a 25-year Purchase Power Agreement (PPA) with Solar Energy Corporation of India (SECI) for the sale of power at a tariff of INR 2.71 per unit. The project has been operational and generating revenue for approximately two years, with a remaining PPA term of approximately 23 years. This aligns seamlessly with IndiGrid’s strategy of retaining operational and revenue-generating assets until maturity.

RSUPL constitutes a strategic enhancement to IndiGrid’s portfolio, representing the company’s largest capacity project at a single site. With this acquisition, IndiGrid’s peak solar capacity is poised to surpass 1 GW of operating solar assets, contributing to total Assets under Management (AUM) of approximately 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 percent 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 percent post this acquisition, leaving adequate headroom for future growth.