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CRISIL Ratings has taken note of the partial stake sale in India Grid Trust by its sponsor, KKR Inc (KKR). KKR holds units in India Grid Trust through its affiliate, Esoteric II Pte Ltd, and has sold 17.32% units, bringing its holding to ~3.85% of the unit capital of the trust. 

CRISIL Ratings understands that even after the stake sale, KKR will remain the sponsor of the trust and will continue to own 100% of IndiGrid Investment Managers Ltd (IIML), the investment manager of India Grid Trust. The board composition of IIML will remain the same.

Moreover, the trust has announced preferential issuance of units of Rs 695 crore to drive growth. This will further dilute the sponsor’s unitholding to ~3.6%. As per InvIT regulations, sponsor is required to hold at least 3 percent of unit capital for the first ten years from the date of issuance of units. Despite the change in unit holding, CRISIL Ratings does not envisage any major change in the credit risk profile of India Grid Trust, with KKR continuing as the sponsor and investment manager for the trust. 

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