KKR merges IndiGrid and Virescent InvITs in unique deal

01 May 2023

IndiGrid, the Infrastructure Investment Trust (InvIT) in the Indian power sector owned by KKR, has acquired Virescent Renewable Energy Trust, which was also floated by the same fund. This deal, the first of its kind, valued Virescent at Rs 40 billion.

IndiGrid will acquire all units of Virescent, along with its investment manager and project manager. A Virescent executive said that Sebi approval is being sought for the transaction, but current laws do not allow such mergers.

Virescent's consolidated revenue for FY23 was Rs 5.37 billion, with an Ebitda of Rs 4.25 billion. Since its InvIT formation in 2020, it has distributed a total of Rs 7.2 billion as dividend, including Rs 3.5 billion in FY23.

The transaction followed a competitive sale process that attracted interest from investors across the world, with about half a dozen domestic and global energy developers, including Jindal Steel and Power, Actis, and an arm of International Holding Corporation of Abu Dhabi, among those in the final stage, apart from Indigrid.

Virescent was set up in 2020 to acquire renewable energy assets in India. It has 16 operating solar projects with a total capacity of 538 MW and assets under management of Rs 41.21 billion as of March 31. In September 2021, Virescent became India's first privately listed renewables-focused InvIT.

In 2021, Virescent raised Rs 4.6 billion in a round led by Alberta Investment Management Corp (AIMCo), one of Canada's largest institutional investment managers. Terra Asia Holdings II Pte is the sponsor of the trust and affiliated with KKR.

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