PowerGrid InvIT IPO subscribed 61% on second day

powergrid ipo

The public issue of PowerGrid Infrastructure Investment Trust was subscribed 61% on the second day of the bidding.

The issue received bids for 25.82 crore equity shares against the issue size of 42.54 crore shares, stock exchange data revealed.

The part of the share sale maintained for qualified institutional investors was subscribed 38% on day two, while that maintained for non-institutional investors was subscribed 88%.

PowerGrid intends to raise almost ₹7,735 crore through the public issue by issuing fresh shares worth ₹4,993.48 crore and an offer for sale of units held by PowerGrid worth ₹2,741.50 crore. The issue will conclude on 3 May.

“We are sanguine on PG Invit’s business model, which is backed by predictable cash flows and offers growth visibility. A Government-backed sponsor like PGCIL further instills confidence”, stated brokerage firm Nirmal Bang in a report to its clients.

“PG InvIT is AAA rated and at the issue price of Rs. 100 per unit, offers 12.0% yield, trading at a spread of 600 bps to the 10 year G-sec (6.0%). In our view, such a spread is very attractive given the high degree of certainty of cash flows & distribution per unit going forward,” Nirmal Bang report added.

The brokerage foresees ₹3 a unit dividend every quarter and 20-30% listing profits. Post listing, Nirmal Bang expects the yields to settle between 9-10% in line with that of the existing listed Invit of Indigrid; which makes the Unit price settling in the range of Rs120-130.

Powergrid Infra InVIT is the first InvIT from a public sector undertaking (PSU).

Powergrid Infra InVIT is performing well so far with positive responses from investors and analysts alike. 

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