Power Grid InvIT is an InvIT aimed at developing, owning, constructing and managing while investing in an infrastructure investment trust. The company adheres to all the obligations listed in the InvIT regulations that align with the power transmission factors in the country as well. The company was registered as InvIT in January 2021 with the market regulatory authority, SEBI. They are sponsored by the Power Grid Corporation of India Ltd. Also, the company acts within the potential of being their Project manager and is a CPSE within the Ministry of Power. Currently, GOI is listed on the stock exchanges called NSE and BSE.
The lead managers for this IPO issue are Axis Capital, ICICI Securities Ltd, HSBC Securities, Edelweiss Financial Services Ltd along with Capital markets (India) Pvt Ltd. The registrar for the IPO is Kfin Technologies Private Limited. With the IPO, the company aims to acquire five projects under the sponsor TBCB projects. These 5 projects will be focused initially along with the acquisition of a complete network of 11 power transmission lines. It would be around 3, 698.59 km and persists three substations comprising 6,630 MVA for total transformation capacity. These portfolio assets will be acquired from 5 different states across the country.
Strength
The company has a credit rating of Provision [ICRA] AAA i.e. stable, Provisional CCR AAA/Stable and CARE AAA (Is) from the ICRA limited, CRISIL rating Ltd and CARE ratings Ltd. Overall, the company is certainly one of the potential businesses coming up with robust IPOs in 2021.
IPO Details
Power Grid InvIT is an infrastructure investment trust with backing from the state-operated electricity transmission utility called the Power Grid Corporation of India. With this IPO issue, the company aims to raise INR 4,999.5 crores. They have filed the draft with the SEBI and have highlighted the fact that the acquisition of 5 working transmission lines would be worth INR 7000 crores. This acquisition will contribute to the current assets portfolio of trust. The platform will gain 74% shares concerning these assets from the sponsors, as they will transfer it to allow the buyouts in the market.
It’s the very first time when a PSU aligned with the power sector would make efforts to monetise the assets using the InvIT model. Further, it’s also new that the funds will be used for under-construction projects concerning capital upliftment. The IPO funds will be allocated for acquiring special purpose vehicles in regions of PG invIT across PowerGrid Jabalpur, PowerGrid Kala Amb, PowerGrid Vizag, and PowerGrid Warora.
The government budget for the financial year 2019-20 has talked about the proposal in order to initiate new and advanced financial products including InvIT concerning its contribution to the brownfield asset monetization strategy in order to accelerate infrastructure investment. The IPO will observe a raise of INR 4,995 crores through the sale of their new units, also, it’s sponsor aims to sell other units worth INR 3000 crores to complete the share sale to a value of INR 8000 crores.