InvIT is a unique investment vehicle aimed to create a source of income for investors by investing in infrastructure projects. Powergrid InvIT will invest in various infrastructure development projects to strengthen interstate power transmission – its primary mission. Infrastructure investment trust (InvIT) functions like a mutual fund, allows investors to invest in various infrastructure assets like roads, power transmission lines to earn a small portion of income over a period. Like REITs, InvIT offers a steady flow of dividend while preserving the base investment.
Bidding for Powergrid InvIT IPO begins on April 29, 2021, and the subscription window is likely to remain open till May 3, 2021.
The issue comprises both primary and secondary components. The total issue size contains shares worth Rs 7,734.99 crores or 773,499,100 units. Rs 4,993.48 crore is offered as primary shares, while Rs 2,741.50 crore is the offer for sale (OFS) scrips.
Investors are required to bid for a minimum of one lot of 1,100 shares. They can increase their bid size in multiples of 1,100 thereafter.
The price band for the shares is fixed at Rs 99-100 per unit. At the upper limit of the price band, the minimum investment amount aggregates to Rs 1,100,00.
Anchor investors’ bidding begins on April 28, 2021. QIB and non-institutional buyers can bid from April 29 to May 3, 2021. The finalisation of share allotment will happen on May 10, 2021, and the tentative date for the InvIT IPO listing is May 17, 2021.
Not more than 75 percent of the IPO is reserved for institutional buyers, of which 60 percent is for anchor investors. Non-institutional investors qualify for the rest 25 percent. Apart from anchor investors, all other investors need to apply for a minimum of 1,100 shares or one lot.
Funds raised from selling fresh equities will be used for providing loans for the Initial Portfolio Assets for repayment of borrowing, including accrued interests and general corporate purposes.
IDBI Trusteeship Services is the Trustee, while PowerGrid Unchahar Transmission is functioning as the investment manager. Powergrid India will be acting as the project manager.
Powergrid India is the largest transmission company in India in terms of total circuit length, which stretches up to 3,698.59 circuit kilometres. The company belongs to schedule ‘A’ ‘Maharatna’ companies group under the power ministry.
Powergrid India was incorporated in 1989 under the Companies Act of 1956 to improve transmission by planning, developing, and coordinating interstate power transmission. It has also diversified into offering consultancy and telecom business to domestic and international clients across twenty-one countries.
Powergrid InvIT is founded to own, construct, operate, maintain, and invest as an infrastructure investment trust permissible under InvIT Regulations. Currently, it has five power transmission projects in five states as its Initial Portfolio Asset.
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