IndiGrid Trust, the infrastructure investment trust (InvIT) sponsored by Sterlite Power Grid Ventures, has reported its results for the first quarter and announced maiden distribution of 0.92 paise per unit to unit-holders for one month of operations, thus becoming the first InvIT to do so.
The first and so far only InvIT in the power transmission sector, IndiGrid went public in May and got listed on the exchanges in June. On Tuesday, the board adopted a quarterly distribution instead of the earlier agreed semi-annual and, therefore, declared the first distribution, the company said, noting these numbers pertain only to the one month period starting from the asset transfer on May 30 and until June 30 of this year.
IndiGrid has reported ₹40.57 crore of revenue and net distributable cash flow of ₹25.77 crore, and reaffirmed the distribution guidance of ₹9.2 a unit for FY18, implying an annualised distribution of ₹11 per unit.
“The declared distribution is almost equivalent to the promised yield of 10.9 per cent, which on annual basis works out to 11.04 per cent yield, but current distribution is just for one month, and going forward they have decided to distribute quarterly which may increase yield by 10-20 basis points,” an analyst with a leading rating agency said. He added that this distribution is in the form of interest income which, unlike dividend income, is not exempt from tax. Hence, post-tax yield could be slightly lower.
IndiGrid announced acquisition of four new assets from Sterlite Power (East North Interconnection Company, Purulia and Kharagpur Transmission Company, RAPP Transmission Company and Maheshwaram Transmission) — all of them being inter-State power transmission projects having combined revenue of about ₹300 crore.
The acquisition, according to Pratik Agarwal, CEO, IndiGrid, may improve distribution by 3-5 per cent annually, which, according to analysts, is a very aggressive target. In practice, unit-holders might be able to get yield of around 12 per cent. The trust currently owns two assets of Sterlite Power — Jabalpur Transmission Company and the Bhopal Dhule Transmission Company — with a total network of eight power transmission lines of 1,936 ckms and two sub-stations having 6,000 MVA of transformation capacity across four States.
While IndiGrid may eventually acquire all 10 inter-State power transmission projects owned by Sterlite Power, it may also look at acquisitions from third parties. IndiGrid plans to grow its portfolio to ₹30,000 crore over the next five years.
Another InvIT listed earlier this year — IRB InvIT Fund — will announce its results for the first quarter ended June 30, 2017, and is expected to declare the first distribution at the board meeting on July 29.
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