IndiGrid to Acquire Shongtong Power Transmission Project for Up to ₹5,316 Crore
IndiGrid Infrastructure Trust (IndiGrid) has entered into Securities Purchase Agreements to acquire Shongtong Power Transmission Limited (SPTL), a power transmission project in Himachal Pradesh, for an enterprise value of up to ₹5,315.8 crore.
The proposed acquisition was announced by IndiGrid Investment Managers Limited on September 5, 2026. The transaction is subject to approval from IndiGrid’s unitholders and other applicable regulatory approvals.
IndiGrid to Acquire Entire Stake and Management Control
Under the proposed transaction, IndiGrid plans to acquire the entire shareholding and management control of Shongtong Power Transmission Limited in one or more tranches.
The acquisition will take place after the project becomes a completed and revenue-generating asset, in accordance with the Transmission Service Agreement (TSA), applicable SEBI InvIT regulations, and other required approvals.
The enterprise value of the acquisition will not exceed ₹53,158 million (₹5,315.8 crore), subject to closing adjustments specified in the purchase agreements.
What Is the Shongtong Power Transmission Project?
Shongtong Power Transmission Limited was incorporated on June 14, 2023, by REC Power Development and Consultancy Limited to execute a transmission system designed to evacuate power from two hydroelectric projects in Himachal Pradesh.
The transmission scheme will support power evacuation from:
- Shongtong Karcham Hydro Electric Project — 450 MW
- Tidong Hydro Electric Project — 150 MW
Together, the two projects have a planned generation capacity of 600 MW.
The expected commercial operation date (COD) for the transmission project is Q4 FY2029.
Project Currently Under Construction
SPTL currently has paid-up capital of ₹5 lakh and has reported nil turnover, as the project is still under construction.
This is important for investors because the acquisition is not of an already operational, cash-generating transmission asset. IndiGrid plans to acquire the project after it is completed and revenue-generating.
Therefore, the eventual financial contribution will depend on project execution, commissioning, and commencement of contracted transmission revenues.
Strategic Fit With IndiGrid’s Business
The proposed acquisition is aligned with IndiGrid’s strategy of owning infrastructure assets backed by long-term contracts, to support stable distributions to its unitholders.
Power transmission assets can provide relatively predictable cash flows when supported by long-term transmission agreements.
The Shongtong project would also strengthen IndiGrid’s exposure to India’s expanding power-transmission infrastructure, particularly the infrastructure required to evacuate electricity generated from large hydroelectric projects.
Related-Party Transaction
The transaction involves a related-party consideration under the applicable InvIT regulations because Terralight Solar Energy Tinwari Private Limited, a group entity of EnerGrid with a common director with IndiGrid’s Investment Manager, is considered a related party.
IndiGrid has stated that the transaction will be undertaken at an arm’s-length price, based on a valuation report obtained in accordance with the applicable InvIT regulations.
The transaction is also subject to compliance with the relevant regulatory requirements.
Acquisition Consideration
The proposed consideration may be paid in cash or another mutually agreed manner, subject to the applicable InvIT regulations.
The maximum enterprise value is:
₹53,158 million, or approximately ₹5,315.8 crore
The final consideration will be subject to closing adjustments under the Securities Purchase Agreements.
Why the Acquisition Matters
The proposed acquisition is significant because it provides IndiGrid with exposure to a large transmission infrastructure project linked to 600 MW of planned hydroelectric generation capacity.
More importantly, the transaction fits IndiGrid’s strategy of building a portfolio of infrastructure assets that can generate long-term contracted cash flows.
However, investors should remember that the project is still under construction and is not currently generating revenue. The expected COD is only in Q4 FY2029, meaning the financial benefits from the asset are expected to emerge over the longer term rather than immediately.
Key Risks to Monitor
Investors should monitor several factors before assessing the full financial impact of the acquisition.
Project execution
Since SPTL is currently under construction, delays in construction or commissioning could affect the expected revenue timeline.
Acquisition price
The enterprise value can reach up to ₹5,315.8 crore, making the valuation and eventual funding structure important factors for IndiGrid’s financial position and distributions.
Regulatory approvals
The transaction requires approval from IndiGrid’s unitholders as well as other applicable regulatory approvals.
Revenue commencement
The project is expected to become revenue-generating only after completion, with the current expected COD in Q4 FY2029.
Points to consider
IndiGrid’s proposed acquisition of Shongtong Power Transmission Limited is a significant portfolio expansion, with an enterprise value of up to ₹5,315.8 crore. The project is strategically aligned with IndiGrid’s focus on long-term contracted power-transmission infrastructure and could strengthen its portfolio over the long term.
However, this is not an immediate earnings-accretive acquisition because the project is still under construction and currently has no turnover. Investors should therefore focus on project execution, financing, regulatory approvals, commissioning timelines, and the eventual commencement of transmission revenues.
If completed, the acquisition could add another long-term transmission asset to IndiGrid’s portfolio and support its objective of maintaining stable distributions to unitholders.