PowerGrid InvIT IPO: PowerGrid InvIT lists at 4% premium over issue price

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NEW DELHI: PowerGrid InvIT, the infrastructure investment trust (InvIT) sponsored by the Power Grid Corporation of India, debuted at Rs 104 per unit on BSE, a premium of 4 per cent over its issue size of Rs 100 per unit.

The IPO, which ran from April 29 to May 3, was subscribed 4.83 times.

Most analysts had recommended investors to subscribe to the issue, which offered the prospects of lucrative and consistent yields. The issue was a good option for investors looking for a 9-12 per cent yield arising from stable cash flow, they had said.

The management says the InvIT is likely to give distributable cash flow at an average of Rs 1,150 crore over the next three years, which implies an 11 per cent cash flow yield, according to analysts.

Its peer Sterlite Power-sponsored IndiGrid is trading at a 9 per cent yield with a 9 per cent premium to its NAV value, while PowerGrid InvIT is available at 11 per cent yield and a 1 per cent premium to its NAV value at the upper price band.

The issue was priced in the band of Rs 99-100. It included fresh issues of units worth Rs 4,993.48 crore, while the rest was an offer for sale. The InvIT will use the proceeds to provide loans to the initial portfolio assets for repayment or pre-payment of debt.

The InvIT proposes to acquire five projects initially with a total network of 11 power transmission lines of approximately 3,698.59 km and three substations having 6,630 MVA of aggregate transformation capacity.

The InvIT has been given a provisional credit rating of AAA (Stable), AAA (Is) Stable and provisional AAA/Stable by ICRA, CARE Ratings and CRISIL Ratings, respectively.

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