KKR's Subsidiary IndiGrid Records Strong Growth with Q2 FY23 Revenue up 6% YoY

IndiGrid [BSE: 540565 | NSE: INDIGRID], which claims to be the first Infrastructure Investment Trust (“InvIT”) in the Indian power sector has announced its results for the quarter ended September 30, 2022.

The consolidated revenue for the quarter was up 6% YoY in Q2 FY23 to ₹ 5,807 million while the consolidated EBITDA also increased by 6% YoY to ₹ 5,354 million. The net distributable cash flow saw a 25% increase YoY to ₹ 2,798 million during the quarter supported by lower finance costs.

The Board of the Investment Manager also approved a Distribution Per Unit (DPU) of ~₹ 3.30 for Q2 FY23 to unitholders in line with the distribution guidance of ₹ 13.20 per unit for FY23. The record date for the distribution is November 16, 2022 and shall be paid as ~₹ 3.11 per unit in the form of interest and ~₹ 0.19 per unit as capital repayment. With this, IndiGrid has distributed ~₹ 65.1 per unit to its investors over the last 5 and a half years since its listing, a total return1 of ~105% on the issue price.

Acquisitions 

IndiGrid continued its track record of accretive acquisitions and completed its acquisition of RSTPCL transmission asset for ~₹ 2,500 million. It is an ISTS TBCB transmission project consisting of 765kV single line circuit with a line length of ~208 ckms. Post this acquisition, the AUM stands at ₹ 213 billion. The consolidated net debt / AUM stood at 57% as of September 30, 2022, leaving significant debt headroom for future growth.

Bullish on Growth 
Commenting on the financial results, Harsh Shah, Chief Executive Officer, said, “I am pleased to report that we reported a solid performance during the quarter with steady YoY growth. Our robust operations allowed us to maintain the growth momentum and keep us on track to meet the FY23 distribution guidance of ₹ 13.20 per unit." He further added, "We welcome IRDAI’s move to separate the investment limits for debt securities and units issued by InvITs/REITs as well as increasing the limit for debt instruments at single InvIT/REIT level. It will enable insurance companies to widen their exposure across InvITs as well as InvITs to expand their sources of borrowings and become more competitive in the infrastructure space." He concluded, "Going forward, we will continue to focus on generating superior and sustainable returns for our investors on the back of our AAA rated balance sheet, resilient operations and accretive acquisitions. We remain optimistic about the growth potential of the power sector in India on the back of supportive regulatory push and envision sizeable growth opportunities in our AUM, while ensuring stability and predictability in the platform.”

Financial Highlights – Consolidated Results (in ₹ million):

IndiGrid  owns 16 power projects, consisting of 42 transmission lines with more than ~7,790 ckms length, 12 substations with ~14,450 MVA transformation capacity and 100 MW (AC) of solar generation capacity. IndiGrid has assets under management (AUM) of over ~₹ 213 billion (~USD 2.6 billion). The investment manager of IndiGrid is wholly owned by KKR. GIC also acquired significant stakes in IndiGrid in 2019.

Last year, IndiGrid made news by entering into the largest transmission deal asset in India.