IndiGrid unitholders approve induction of KKR's associate Esoteric II as sponsor

KKR is a leading global investment firm with over 43 years of experience and USD 222 billion of assets under management (AUM) as of June 30, 2020. As part of KKR's first investment through its Asia Pacific Infrastructure strategy, it had invested Rs 1,084 crore in May 2019 and currently owns 23 per cent stake in IndiGrid.

Infrastructure investment trust IndiGrid on Tuesday said its unitholders have approved induction of global investment firm KKR's associate Esoteric II as a sponsor. "The unitholders of India Grid Trust (IndiGrid) have approved the induction of Esoteric II Pte Ltd, an affiliate of KKR & Co Inc (Esoteric II) as a sponsor (as defined under the InvIT Regulations) with special majority (> 75 per cent voting)," a company statement said.

The special resolution to induct Esoteric II as a sponsor was passed with a special majority in the 3rd Annual General Meeting of IndiGrid held on September 28, 2020. All regulatory approvals including the board's assent are in place for Esoteric II's induction as a co-sponsor.

This move marks an extension of IndiGrid's strategic relationship with KKR and underscores IndiGrid as a compelling investment opportunity for long-term investors, it added. KKR is a leading global investment firm with over 43 years of experience and USD 222 billion of assets under management (AUM) as of June 30, 2020.

As part of KKR's first investment through its Asia Pacific Infrastructure strategy, it had invested Rs 1,084 crore in May 2019 and currently owns 23 per cent stake in IndiGrid. Separately, KKR also owns 60 per cent stake in Sterlite Investment Managers Ltd (SIML), the investment manager of IndiGrid.

IndiGrid has a proven track record of consistent distribution over the last 13 quarters and has distributed a total of Rs 36.56 per unit to its investors since listing. The platform has maintained a AAA rating by efficiently managing its assets and making nine accretive acquisitions since its listing, in a competitive landscape. Its AUM has increased more than three-fold from Rs 3,800 crore in June 2017 to Rs 13,600 crore in September 2020.

Sanjay Nayar, CEO of KKR India, said in the statement, "Being named as an inducted sponsor of IndiGrid further reaffirms our steadfast commitment to support the Trust's exciting journey and our priority in addressing India's rapidly growing infrastructure needs. "With the combination of our strong sector expertise and India experience, we aim to continue assisting IndiGrid's management team in expanding its platform and providing accessible electricity to Indian communities." Harsh Shah, Chief Executive Officer of IndiGrid, said in the statement, "We welcome KKR's induction as a sponsor and look forward to benefiting from KKR's deep expertise and focus on value creation for IndiGrid unit holders." KKR's induction as a sponsor will expand IndiGrid's access to long-term capital and allow the Trust to leverage KKR's global experience of investment management, along with enhancing the corporate governance standards in line with global standards," he said.

"This puts IndiGrid in good stead to achieve its aim of being among Asia's most admired yield vehicles with an AUM of Rs 30,000 over the next two years," Shah added. In 2020, IndiGrid has acquired assets worth Rs 2,500 crore (USD 340 million). In addition to that, it had entered into an exclusive framework agreement with Sterlite Power to acquire three projects worth Rs 6,500 crore (USD 880 million) as and when they are commissioned, of which the GPTL has been acquired by IndiGrid.

In FY20, IndiGrid had raised Rs 2,510 crore (USD 340 million) of capital by way of preferential issue which was subscribed by KKR and GIC amongst other marquee investors. KKR currently owns 23 per cent stake in IndiGrid while GIC owns 20 per cent. Separately, KKR also owns majority interest in the Investment Manager of IndiGrid.