IndiGrid Targets To Increase Income Payout To Rs 16 In FY26

IndiGrid Infrastructure Trust, India's first and largest listed power sector infrastructure investment trust, is targeting distributions per unit of Rs 16 in FY26, according to Managing Director Harsh Shah. This will be fuelled by the rising demand in the renewable energy sector.

Distribution per unit refers to the amount of income an investor receives for each unit of ownership in an infrastructure investment trust.

"The growth in the sector BESS (Battery Energy Storage Systems) or solar going to result in incremental DPU. We have increased the forecast to Rs 16 a unit; for an InvIT or a yield platform, it's a significant jump," he said during a conversation with NDTV Profit on Tuesday.

"And if one looks at the five-year track record, it's a growth from Rs 12.75 to now Rs 16. One of the significant DPU growth stories that's panning out in the country," Shah said.

This projected increase from last year's Rs 15.35 is underpinned by a multi-faceted strategy.

"Growth comes from three factors in this business. One is based on the asset that we've acquired. So, over the last two years, we've acquired more than Rs 6,000-7,000 crores of projects," he said.

The second one is financing. As the interest rate reduces, there is a significant bump in terms of Net Distributable Cash Flows. The third is this year in terms of operating efficiency, the top executive explained. "As we manage larger assets, our cost base is relatively cut down."

IndiGrid has a capital expenditure outlay of Rs 4,000 crore for ongoing projects, with the capacity to undertake an additional Rs 10,000 crore, depending on successful bids. "We do both – organic, where we develop projects on our own, whether it's transmission or battery storage, or we do acquisitions of transmission, battery storage and solar."

A key pillar of expansion is the burgeoning battery storage market. IndiGrid Infrastructure Trust is making a significant foray into this critical area of the energy transition, having recently commissioned India's first standalone regulated tariff BESS project in Delhi.

"We are extremely positive about the BESS opportunity and the requirement for India," Shah said, predicting a national need exceeding 50 gigawatt-hours in the coming years. 

"We are looking at commissioning another 900 MWh of battery in the next 12 months and we are very excited about this opportunity, having been fortunate to win some of the early tenders at fairly good returns,” he added.

Addressing the company's financial structure, Shah clarified the distinction between book value and Net Asset Value, advising investors to focus on the latter. "NAV is the NPV (Net Present Value) of future cash flows that you will earn... that is the right perspective to look at this business," he explained.