India Grid Trust (BSE:540565) signed a share purchase agreement to acquire 74% stake in Parbati Koldam Transmission Company Limited from Reliance Infrastructure Limited (BSE:500390) for an enterprise value of INR 9 billion on November 28, 2020. The enterprise value for acquiring 100 per cent is INR 9 billion, inclusive of cash reserves and normalized tariff receivable, subject to adjustments on account of movement in cash, deviation in outstanding debt, tariff receivables, assets and liabilities outstanding as on actual closing date of the transaction per the share purchase agreement agreed between the parties. The transaction shall be funded with available preferential issue funds of INR 25 billion, debt headroom and internal accruals.

After the transaction, Parbati Koldam Transmission Company Limited shall cease to be a subsidiary of Reliance Infrastructure Limited. For the financial year ended March 31, 2020, Parbati Koldam Transmission Company Limited reported total revenues of INR 2.1 billion and net worth of INR 4.4 billion. The completion of acquisition is subject to the terms of share purchase and other definitive agreements and requisite regulatory other relevant approvals, approval of Power Grid Corporation of India Limited, the owner of 26% stake in Parbati Koldam Transmission Company Limited, approval of existing project lenders and completion of contractual obligations.

The transaction is expected to be completed in fourth quarter of fiscal year 2021. The transaction is not expected to result in any equity dilution for India Grid Trust.