PowerGrid InvIT IPO subscribed 18% so far on second day

Subscription for the IPO of Power Grid InnvIT increased gradually on the second day of the bidding process on Friday. The issue has been subscribed 18 percent till now. Till noon on Friday, the issue received bids for 7,86,07,100 units out of the 42,54,25,000 units on offer for subscription.

The infrastructure investment trust has been lauded as a good long-term option for investors looking for guaranteed 10-12 percent returns as analysts expect the InvIT to easily generate that much yield annually.

The infrastructure trust is a first of its kind offering by a state-owned entity in India and is priced at Rs. 99-100 per unit. Power Grid InvIT is expecting to raise Rs 7,735 crore via the issue which includes a fresh issue as well as an offer for sale from the sponsor.

The infrastructure trust intends to take over five projects initially from Power Grid with a cumulative network of 11 power transmission lines of 3,698 km and three substations having 6,630 MVA of total transformation capacity across five Indian states.

Analysts state investors can subscribe to the issue as it offers prospects of profitable and consistent yields. 

Commenting on the development, Rupesh Sankhe of Edelweiss Securities said, “The product offers stability in cash flow, low counterparty risks, a strong lineage of Power Grid Corporation, and growth from the future acquisition of projects. This along with replacement of Power Grid Corporation debt via IPO proceeds indicates the InvIT will start as debt-free.”

Powergrid is looking at a good response from investors and analysts. If the IPO is successful, the company would be able to greatly scale its operations.

Shishir Gupta, Founder and CEO, StartupLanes

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