Three companies in fray for Sterlite JV's 2 transmission projects

Sterlite Power and its joint venture (JV) partner AMP Capital have received bids from three prospective buyers – IndiGrid, Torrent Power and Edelweiss infrastructure fund – for its two power transmission assets worth ₹3,500-4,000 crore on enterprise value basis, said two people aware of the development. The two transmission projects are likely to fetch an equity value of about ₹1,000 crore, they said.

Sterlite Power and AMP Capital came together in December 2020 to set up a platform, committing to invest $300 million to develop transmission assets worth about $1 billion. The two assets from this JV platform that have been put on the block are Lakadia Vadodara Transmission and Udupi-Kasargod Transmission, with a combined length of about 450 kilometres. The Lakadia Vadodara line, commissioned earlier this month, will help deliver more than 5,000 MW of renewable power from Kutch and Bhuj in Gujarat to the national grid. The Udupi-Kasargode line is expected to be commissioned in the coming months. The other two projects under this JV are Goa Tamnar Transmission and Mumbai Urja Marg Transmission.

“Several financial investors and strategics had evinced interest in the sale process which was launched last year. Sterlite has received bids from three entities – IndiGrid, Torrent Power and Edelweiss Infra Fund – and these bidders are currently engaged in due diligence of the assets,” said one of the persons, who did not wish to be identified. Emails sent to IndiGrid, Sterlite Power, Torrent Power and Edelweiss remained unanswered till press time.

“Transmission assets continue to be one of the most attractive infrastructure opportunities in India given the long-term asset life of 35 years and strong counterparty in PowerGrid, which makes these assets a good fit for investors, especially those looking for yield generating assets,” said the second person.

“However, the supply side is constrained compared to the roads or renewables sectors, as not too many assets are available in the private market and thus any good quality asset on the block is likely to generate strong buyer interest.”


Business Asia
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