The KKR-owned Infrastructure Investment Trust (InvIT) in the Indian power industry, India Grid Trust (IndiGrid), has acquired Virescent Renewable Energy Trust, which was also formed by the same firm. The groundbreaking transaction valued Virescent at 4,000 crore. According to a press announcement from the company, IndiGrid will purchase all of Virescent's shares as well as its investment manager and project manager.
According to a Virescent official, the acquisition is subject to Sebi approval. Such mergers are currently not permitted by law. The combined FY23 revenue for Virescent was $537 crore, with an Ebitda of $425 crore. According to the press statement, it paid out a total of 350 crore in dividends in FY23, bringing the total paid out since InvIT's establishment in 2020 to 720 crore.
The acquisition came after a competitive sale procedure that drew interest from investors all over the world. Apart from Indigrid, there were about six other domestic and international energy developers present in the final phase, including Jindal Steel and Power, Actis, and a division of the International Holding Corporation of Abu Dhabi. In order to buy renewable energy assets in India,
Virescent was founded in 2020. Its 16 operational solar projects have a combined capacity of 538 MW, and as of March 31, its assets under management (AUM) were Rs 4,121 crore. Virescent became the country's first privately listed InvIT with an emphasis on renewable energy in September 2021. One of Canada's leading institutional investment firms, Alberta Investment Management Corp (AIMCo), led a round in which Virescent raised Rs 460 crore in 2021. The trust's sponsor and a member of KKR is Terra Asia Holdings II Pte.
Around 90% of the Virescent portfolio, according to Crisil, is protected by power purchase agreements (PPAs) with predetermined tariffs and 25-year terms. Twelve years have passed since the beginning of commercial operations, and the remaining capacity is currently locked up. It added that by doing this, revenue visibility is increased, offtake risk is reduced, and steady cash flow is ensured. The first and largest InvIT in India for electricity transmission, IndiGrid was established in 2016. It is responsible for the ownership, management, and operation of reliable power-delivery assets as well as transmission networks. It has 14 substations with a transformation capacity of 17,550 MVA, 17 power projects with transmission lines more than 8,416 ckm, and 100 MWAC of solar generation capacity.
After a very competitive process, Sanjay Grewal, chief executive officer of Virescent, said, "We are delighted to enter into this landmark transaction with IndiGrid, given our common strategic focus to expand our renewable energy portfolio and synergies across both platforms." "Renewable energy solutions will become more crucial as a source of energy for its citizens and economic progress as India moves closer to overtaking the United States as the world's most populous nation."
Indigrid, Virescent, and Edelweiss' AnZen India Energy Yield Plus Trust are India's top energy-focused InvITs. The Mahindra Group intends to issue an InvIT for Mahindra Susten, its platform for sustainable energy. While Virescent is a solely renewable energy trust, KKR-owned Indigrid and Edelweiss' AnZen both possess portfolios of power transmission and renewable energy assets.
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