PowerGrid InvIT IPO expected to open next week

powergrid ipo

PowerGrid Infrastructure Investment Trust is expected to roll out its initial public offering at the end of April, two people familiar with the development revealed.

This marks the first time that a state-owned entity will be monetizing its infrastructure assets by the InvIT route. This will also be the third InvIT to be listed in the Indian markets, after IRB InvIT and India Grid Trust both of which went public in 2017.

The IPO will notice the InvIT raise to ₹4,995 crore by selling new units of the trust, while its sponsor Power Grid also intends to sell units worth up to Rs3,000 crore through the IPO, taking the total size of the share sale to nearly Rs8,000 crore.

The InvIT will initially comprise 11 power transmission lines that are currently owned and operated by Power Grid.

An infrastructure investment trust is a quasi debt instrument that offers investors a regular yield received from cash flows from operating infrastructure projects such as roads, transmission lines, or renewable energy projects. Publicly traded InvITs, like the one offered by Power Grid can also provide an equity upside to investors.

ICICI Securities, Axis Capital, Edelweiss Financial Services, and HSBC Securities and Capital Markets India are the lead managers to the issue.

Power Grid is not the sole state-owned entity that intends to raise funds through the InvIT route.

The state-owned National Highways Authority of India (NHAI) intends to mobilize nearly ₹10,000 crore this calendar year through an InvIT and other avenues.

If the IPO happens successfully, it could make PowerGrid the industry leader and present great growth opportunities.

Shishir Gupta, Founder and CEO, StartupLanes

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