IndiGrid Infrastructure Trust has entered an agreement to acquire a 100% stake in Shongtong Power Transmission Limited for an enterprise value of up to Rs 5,316 crore. This strategic move aims to expand its power evacuation portfolio in Himachal Pradesh. The project, which supports major hydro-electric sites, is expected to be operational by Q4 FY2029. Investors should note this is a long-term play, as the asset is currently under construction and requires regulatory and unitholder approval before completion.
IndiGrid to Acquire Shongtong Power Transmission for Rs 5,316 Crore
Enterprise Value: Rs 5,316 crore | Target: 100% stake in Shongtong Power Transmission Limited.
Reader Takeaway: This acquisition adds long-term transmission capacity but revenue impact is deferred until commissioning in Q4 FY2029.
What just happened
IndiGrid Infrastructure Trust has executed a Securities Purchase Agreement (SPA) to acquire 100% shareholding and management control of Shongtong Power Transmission Limited (SPTL). The enterprise value for the transaction is capped at Rs 5,316 crore, subject to customary closing adjustments. The deal is categorized as a related party transaction under InvIT regulations, as the seller, Enerica ReGrid Infra Private Limited, shares a common director with IndiGrid’s Investment Manager.
Asset Details
SPTL was incorporated in June 2023 by REC Power Development and Consultancy Limited. It is an under-construction project designed to evacuate power from the 450 MW Shongtong Karcham and 150 MW Tidong hydro-electric projects in Himachal Pradesh. As it is in the development phase, the entity currently reports nil turnover.
Strategic Rationale
The acquisition aligns with IndiGrid's mandate to enhance distributions for unitholders by securing assets backed by long-term Transmission Service Agreements. The project is projected to achieve its Commercial Operation Date (COD) by the fourth quarter of FY2029.
Transaction Terms and Conditions
The transaction will be completed in one or more tranches, contingent upon the project reaching completion and becoming revenue-generating. The deal remains subject to approval by IndiGrid’s unitholders, alongside necessary government and regulatory clearances.
Risks to watch
As the asset is currently under construction, the primary risks include project execution delays and the ability to maintain the target COD for FY2029. Furthermore, the transaction requires specific unitholder and regulatory green lights to proceed.