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State-run Power Grid Corporation of India-owned PowerGrid Infrastructure Investment Trust Rs 7,735 crore initial public offering (IPO) is set to make its debut on the bourses on April 29. This will be the first-ever InvIT IPO by a state-owned company and will only be the third InvIT to be listed on the Indian bourses after IRB InvIT and India Grid Trust went public in 2017.
An Infrastructure Investment Trust (InvITs) is like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as return.
“The PowerGrid Infrastructure Investment Trust is newly set up and as such it does not have any established operating history which makes it difficult to analyse the future growth prospects. However, the sponsor has a ‘Maharatna’ status from GoI. The trust intends to distribute atleast 90% of the net cash available for distribution once at least every quarter. Given the limited data and nature of such INVITs, it will only attract long term investors eyeing fixed returns,” said grey market tracker Abhay Doshi, Founder, UnlistedArena.com.
Here are key things to know before subscribing to the public issue:
Open and close date
The IPO of PowerGrid Infrastructure Investment Trust will open on April 29 and the issue will close on May 3. The anchor investors will start bidding on April 28.
Issue size
The state-owned Investment Trust plans to raise Rs 7,735 crore through the public listing of shares. The public offer comprises a fresh issue of equity shares worth Rs 4,993.48 crore and an offer for sale of 2,741.51 crore by selling unitholders.
Price band
The price band for PowerGrid Infrastructure Investment Trust IPO has been fixed at Rs 99-100 a share.
Lot size
The POWERGRID InvIT IPO April 2021 market lot size is 1100 shares.
Objective of issue
The trust intends to use net proceeds of the fresh issue to meet working capital requirements and general corporate purposes.
About the trust
Powergrid InvIT (Infrastructure Investment Trust) owns, construct, operate, maintain and invest in power transmission assets in India. Powergrid InvIT registered with SEBI as an InvIT on January 7, 2021.
Powergrid InvIT has been given a credit rating of Provisional [ICRA] AAA (Stable), CARE AAA (Is); Stable and Provisional CCR AAA/Stable by ICRA Limited, CARE Ratings Limited, and CRISIL Ratings Limited, respectively.
Retail investors
PowerGrid InvIT has reserved 75% of the issue for Institutional investors while only 25% is for non-institutional investors.
Book Running Lead Managers and Registrar to the IPO
Book Running Lead Managers (BRLMs) for this issue are Axis Capital, Edelweiss Financial Services, HSBC Securities and Capital Markets and ICICI Securities. While KFintech is the registrar to the issue.
Listing of shares
The issue is likely to finalise the basis of allotment by May 10, and the initialisation of funds and credit of equity shares to depository accounts of the allottee may take place by May 11. The InvIT is expected to make its stock market debut BSE and NSE on May 17, 2021.