Sterlite Energy, one of many greatest non-public builders of energy transmission strains in India, is in discussions with pension funds and sovereign wealth funds to boost $500 million to $1 billion, stated two individuals conscious of the event.
Sterlite Energy has a portfolio of 28 tasks protecting roughly 13,950 circuit kms of transmission strains in India and Brazil. It additionally has a portfolio of high-performance energy conductors, additional excessive voltage cables and optical floor wires.
“Sterlite has been assembly buyers to boost funds. It would look to boost between $500 million and $1 billion, which is able to assist them bid for tasks and develop their portfolio each in India and in Brazil,” stated one of many two individuals looking for anonymity.
In December 2020, Sterlite Energy and funding supervisor AMP Capital had introduced plans to arrange 4 energy transmission tasks price $1 billion, with each events agreeing to speculate $150 million every.
In keeping with the second particular person, overseas buyers, particularly affected person capital buyers corresponding to pensions and sovereign funds, are eager to put money into transmission tasks in India because the asset class has a number of benefits over different infrastructure tasks.
“Transmission strains have an extended concession tenure of 35 years in comparison with roads or renewables the place you could have 20-25 years concessions. This makes the sector extra enticing to long-term buyers corresponding to pension funds and sovereign funds. Moreover, not like energy technology, the place you could have fee points with state discoms, the transmission sector doesn’t have an identical problem contemplating that the counterparty is PowerGrid Corp,” he stated.
“There are sufficient funding alternatives within the transmission sector in India as just a few non-public sector gamers are energetic within the area,” he added.
Most transmission belongings within the non-public sector are held both by Sterlite or Adani Transmission. Just a few different smaller firms personal one or two belongings. Adani Transmission has a portfolio of greater than 18,500 circuit km of transmission strains. “Given the sector’s attractiveness and few funding alternatives, Sterlite’s fundraising plans are prone to see sturdy curiosity,” he added.
Queries emailed to Sterlite Energy didn’t elicit any response.
Sterlite Energy had sponsored IndiGrid, the nation’s first energy sector Infrastructure Funding Belief (InvIT), which went public in 2017. In 2019, non-public fairness investor KKR and Singapore’s sovereign wealth fund GIC invested over ₹2,000 crore to select up a 42% stake in Indigrid. Earlier this 12 months Sterlite exited from the InvIT.
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