IndiGrid, an infrastructure investment trust (InvIT) controlled by private equity firm KKR, has signed a share purchase agreement with ReNew Solar Power Private Limited (RSPPL) to acquire ReNew Solar Urja Private Limited (RSUPL) at an enterprise valuation of about $187 million (Rs1,550 crore).
The valuation, including net working capital and cash, comes to about $199 million (Rs1,650 crore), the company said in a statement.
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, the statement added.
In line with the terms of the definitive agreements and the power purchase agreement (PPA), along with the lock-in restrictions, IndiGrid will acquire 100% shareholding and management control of RSUPL, subject to requisite regulatory approvals.
IndiGrid said it will fund the acquisition through a combination of equity, internal accruals, and debt. During the first nine months of this fiscal, IndiGrid has raised equity to the tune of Rs 1,050 crore through preferential allotment and institutional placement. This gives it a headroom of Rs 6,000–7,000 crore at a leverage threshold of 70%.
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 with total assets under management (AUM) of Rs 285 billion.
“India is witnessing a steep increase in its power demand to fuel its rapid economic growth. Given 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 a 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,” said Harsh Shah, Chief Executive Officer, and whole-time director of IndiGrid.
Incorporated in November 2019, RSUPL operates a 300 MW (AC) solar power plant in Rajasthan. During the FY 2022-23, RSUPL recorded a total revenue of Rs. 225 crore.