Global private equity firm KKR has sold the country’s first and only renewable energy (RE) Infrastructure Investment Trust (InvIT), Virescent Renewable Energy Trust (VRET) to India Grid Trust (IndiGrid). The deal size is estimated to be Rs 4,000 crore, said sources.
In an announcement on Friday, VRET said it signed definitive agreements with BSE-listed IndiGrid, country’s first and largest power transmission InvIT, to buy all units of VRET along with its investment and project managers.
Neither VRET or IndiGrid disclosed the size of the transaction. VRET has a portfolio of 16 operating solar projects totaling 538 megawatt (Mw) capacity with an asset under management of Rs 4,121 crore as of March 31.
Through an exchange notification, IndiGrid said its board had approved the “proposed acquisition of 100 per cent of units in Virescent Renewable Energy Trust.... 100 per cent of the share capital of Virescent Infrastructure Investment Manager and Virescent Renewable Energy Project Manager...”
VRET was launched in 2020 by Virescent Infrastructure, which is backed by KKR. In 2021, VRET became India’s first privately listed renewables-focused InvIT. Recently, it announced its sixth acquisition, which will bring its total capacity to 563 Mw upon completion, said the company.
Sanjay Grewal, chief executive officer of VRET, 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, after a highly competitive process.” Grewal did not confirm the transaction size.
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The transaction will involve IndiGrid taking over all of VRET’s 16 project special purpose vehicles, and Virescent will get delisted and dissolved, said executives.
Sources indicated the scale-up of the Virescent platform, both in terms of capacity and Ebitda, happened quicker than expected by the management, leading to the sponsor KKR exploring the exit route. For the year ended March 31, VRET’s consolidated revenue stood at Rs 537 crore with an Ebitda of Rs 425 crore, said the firm’s public statement.
JP Morgan was hired in 2022 to run the sale process. They received multiple non-binding offers from high-quality investors. Three were taken into the final round. Several players, such as Adani Green, Shell, and Actis, had reportedly shown interest.
IndiGrid was set up in 2016 and sponsored by investment company KKR and Vedanta group’s Sterlite Power. Its portfolio currently consists of 16 power projects, majorly power transmission. It recently branched out and started acquiring renewable energy assets as well.
IndiGrid Investment Managers is the investment manager of the InvIT and is majority owned by Electron IM, an affiliate of the KKR Sponsor.