- IndiGrid has successfully completed a share purchase agreement to acquire ReNew Solar Urja Private Limited from ReNew Solar Power Private Limited. This acquisition encompasses a solar project with a capacity of 300 MW (AC).
- With the addition of this acquisition, IndiGrid’s portfolio is set to surpass a peak capacity of 1 GW in operating solar assets.
IndiGrid has announced that it has entered into a share purchase agreement with ReNew Solar Power Private Limited (RSPPL) to acquire their subsidiary, ReNew Solar Urja Private Limited (RSUPL), at an enterprise valuation of INR 1,550 crores, with the total consideration, including net working capital and cash, amounting to approximately INR 1,650 crore. Additionally, there is a contingent earn-out provision linked to Change-In-Law (CIL) related to Basic Customs Duty (BCD) and GST, to be paid to RSPPL upon the realization of the first payment. The acquisition, subject to regulatory approvals, will grant IndiGrid full control and ownership of RSUPL.
RSUPL, operational since December 2021, boasts a 300 MW (AC) solar generation facility situated in the sun-soaked landscapes of Jaisalmer, Rajasthan. The project holds a lucrative 25-year Power Purchase Agreement (PPA) with the Solar Energy Corporation of India (SECI), securing a tariff of INR 2.71 per unit. Having been successfully operational and revenue-generating for approximately two years, the PPA still has a substantial remaining term of approximately 23 years. This aligns perfectly with IndiGrid’s strategic vision of nurturing operational and revenue-generating assets until maturity.
The addition of RSUPL to IndiGrid’s portfolio is strategically significant as it becomes the company’s largest capacity project located at a single site. With this acquisition, IndiGrid’s peak solar capacity will surpass 1 GW, further solidifying its position in the industry. The total Assets Under Management (AUM) will reach approximately INR 285 billion. Harsh Shah, Chief Executive Officer, and Whole Time Director of IndiGrid, expressed his enthusiasm for the acquisition, emphasizing India’s surging power demand driven by rapid economic growth. He underlined the strategic importance of renewable energy projects in India’s energy transition journey and highlighted RSUPL’s exceptional quality and location, with abundant solar irradiation. Shah stressed that RSUPL aligns perfectly with their strategic focus, ensuring sustainable growth and long-term cash-flow addition to the portfolio.
In the first nine months of the fiscal year, IndiGrid has successfully raised equity funds of approximately INR 1,050 crore through preferential allotment and institutional placement. This has provided substantial growth potential for the company, with a headroom of approximately INR 6,000 to 7,000 crores, considering a leverage threshold of 70% in accordance with SEBI InvIT Regulations. The financing for this acquisition will be sourced through a combination of equity, internal accruals, and debt. Post-acquisition, the net debt/AUM ratio is approximately 62.5%, leaving ample room for future growth and expansion in IndiGrid’s promising journey within India’s power sector infrastructure.