India Grid Trust: Esoteric Il to Sell Up to 17.32% Stake via OFS

India Grid Trust, the country’s first listed power sector infrastructure investment trust (InvIT), is set to witness a huge stake sale this week. The sponsor, Esoteric II Pte., an affiliate of U.S. private equity firm KKR, plans to divest up to 17.32% of its holdings through an Offer For Sale (OFS) scheduled for August 22-23, 2024.

Offer Details & Structure

The OFS will be conducted in two phases: the offer will open for non-retail investors on August 22, 2024 and for retail investors on August 23, 2024. Esoteric II Pte. intends to sell 135.8 million shares of India Grid Trust at a floor price of Rs.132 per share. The sale is structured with a base offer of 9.66% (75 million shares) and an additional 7.66% (60 million shares) as an oversubscription option.

The BSE has been designated as the stock exchange for the transaction, with Axis Capital, Ambit Capital, and SBICAP Securities appointed as the selling brokers. Additionally, 10% of the offered units are reserved for retail investors, contingent upon valid bids.

Financial Context & Developments

As of the close of trading yesterday, August 21, shares of India Grid Trust settled at Rs.136.80 per share on the BSE, marginally lower by 0.20%, the decline occurred despite a positive market trend, as the Nifty 50 index increased by 0.29%.

India Grid Trust, established in 2016 under SEBI’s InvIT regulations, manages assets worth over Rs.29,255 crore ($3.5 billion). Recently, the company announced a partnership with British International Investment (BII), the Norwegian Climate Investment Fund, and Techno Electric and Engineering Company to develop three power transmission projects in India. These projects are expected to support the evacuation of upto 6 GW of renewable energy in Madhya Pradesh and Maharashtra.

Conclusion: In conclusion, this stake sale by Esoteric II Pte. could mix things up for India Grid Trust, with a pretty sizable chunk—17.32%—on the line. How the OFS goes could give us a sense of where things are headed for the trust and how investors are feeling about it. It’s definitely one to watch, as it might set the tone for what’s next.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.