IndiGrid to Acquire Virescent Renewable Energy Trust for ₹40 Billion
The sale attracted participation of several global investors
Renewables-focused infrastructure investment trust (InvIT) Virescent Renewable Energy Trust (VRET) said it has signed definitive agreements under which IndiGrid will acquire all units of Virescent for up to ₹40 billion (~$487 million).
IndiGrid executed a unit purchase agreement with Virescent on May 12, 2023, to acquire 100% of the latter’s units, in one or more tranches.
The signing of the agreement follows a competitive sales process that attracted interest from several investors based in markets globally.
Terra Asia Holdings is the seller of the units of VRET and is controlled and managed solely by Kohlberg Kravis Roberts & Company, along with one of the IndiGrid sponsors, and is a related party of IndiGrid.
Since its launch, Virescent has scaled its portfolio, which now includes 16 operating solar projects totaling 538 MW of capacity with ₹41.2 billion (~$501 million) worth of assets under management as of March 2021.
VRET recently also announced its sixth acquisition, which will bring its total capacity to 563 MW once the transaction is completed.
Virescent Renewable Trust’s revenue stood at ₹5.3 billion (~$65 million), and the trust’s total distribution was worth ₹3.5 billion (~$43 million) during 2023 while it is ₹7.2 billion (~$88 million) since the formation of InvIT.
IndiGrid owns 17 power projects with transmission lines of more than 8,468 circuit kilometers, 13 substations with ~17,550 MVA transformation capacity, and 100 MW of solar generation capacity. Set up in 2016, it is India’s first InvIT in the power transmission sector.
Virescent’s CEO Sanjay Grewal said, “As India marches towards becoming the most populous country globally, renewable energy solutions will grow in their importance as an energy source for its citizens and economic progress. 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 after a highly competitive process.”
Backed by global investment firm Kohlberg Kravis Roberts & Company, the Virescent Renewables Trust was established in 2020 to acquire renewable energy assets in India against a backdrop of the country’s rapidly growing renewable energy demands.
In March this year, Godawari Green Energy, a wholly-owned subsidiary of Virescent Renewable Energy Trust, acquired a 25 MW operational solar project from Samta Energy in the Surendranagar district of Gujarat.
Recently, IndiGrid announced that the International Finance Corporation has invested ₹11.4 billion (~$138.74 million) in its listed non-convertible debentures. IndiGrid intends to use this debt to fund its refinancing needs for the fiscal year 2024.