Power Grid Corporation likely to launch Rs 7,700 crores InvIT IPO on April 29


LAST UPDATED: April 24, 2021, 1:25 p.m.

New Delhi (Anish Yande): The state-owned PSU, Power Grid Corporation of India, is likely to launch an infrastructure investment trust IPO on April 29. The InvIT IPO would be the first-ever such IPO launched by a PSU. Shares of PowerGrid rose by 4.5 percent on Friday’s trading session following the reports of the upcoming IPO.

PowerGrid shares rose to an intraday high of Rs 212.90 per share on BSE on Friday. Shares of the electricity transmission company opened at Rs 204.05 per share. 

PowerGrid to launch InvIT IPO:  

The electricity transmission company would be launching its InvIT IPO consisting of a fresh issue of up to Rs 4,993 crore. The InvIT IPO would comprise of an offer for sale amounting to Rs 3,000 crores. The total size of the Power Grid InvIT IPO would amount to around Rs 8,000 crores.

An infrastructure investment trust is a collective investment scheme similar to a mutual fund. Through an InvIT, individual and institutional investors can make a direct investment in the firm’s infrastructure projects. The investors can earn a portion of the income generated from the project as returns.

The InvIT is a tiered structure through which investors invest in eligible infrastructure projects either directly or via special purpose vehicles. Power Grid InvIT would comprise of 11 power transmission lines that are currently owned and operated by the state-owned PSU.

Power Grid Corporation files DHRP for InvIT IPO:

Power Grid Corporation of India had filed the draft red herring prospectus for the InvIT IPO with market regulator SEBI on January 27, 2021.

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According to the DHRP filed by Power Grid, the lead managers to the Power Grid InvIT IPO are investment banks Axis Capital, Edelweiss Financial Services,  HSBC Securities, ICICI Securities, and Capital Markets. Law firms J Sagar Associates and Cyril Amarchand Mangaldas are the legal advisors for the issue.

According to reports, the National Highway Authority of India (NHAI) is also considering launching an InvIT IPO. The state-owned firm would be aiming to raise around Rs 5,000 crore through the issue.

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