The Issue opens:29th April, 2021
The Issue closes: 3rd May, 2021
Listing date: 17th May 2021
Price Band – Rs.99-100
Min Bid Lot – 1100
Power Grid Infrastructure Investment (PGInvIT) is owned(sponsored) by Power Grid Corporation of India which has been conferred a Maharatna PSU status. The Trust was registered with SEBI on January 7, 2021 as an infrastructure investment trust. Investment Manager of PGInvIT is PowerGrid Unchahar Transmission Limited, a wholly owned subsidiary of PGCIL. PowerGrid InvIT has been formed to own, construct, operate, maintain, and invest in power transmission assets as an infrastructure investment trust.
The trust's initial portfolio assets will have five assets that include, PVTL (PowerGrid Vizag Transmission Ltd), PKATL (PowerGrid Kala Amb Transmission Ltd), PPTL (PowerGrid Parli Transmission Ltd), PWTL (PowerGrid Warora Transmission Ltd) and PJTL (PowerGrid Jabalpur Transmission Ltd). Consistent & stable cashflows, lower operating costs would help to generate higher cashflows to unit holders and market competitive advantage (monopoly) makes this InvIT issue attractive for investors.
Total issuance of Rs 77.34 billion includes a fresh issue of Rs 49.93 billion and an offer for sale of Rs 27.41 billion by the selling unitholder.
Around 75% of the offer is reserved for institutional investors, of which 60% is reserved for anchor investors. Rest 25% portion will be available for allocation to non-institutional investors on a proportionate basis.
Directors of the Investment Manager
Seema Gupta is the non-executive chairperson of the board of directors of the Investment Manager. She is also holding the post of Director (Operations) in Power Grid Corporation of India Limited (the Sponsor). Prior to taking up this assignment, she was an executive director (Northern Region-I) in Power Grid Corporation of India Limited.
Sunil Kumar Sharma is an independent director on the board of directors of the Investment Manager. He has served as the chairman and managing director of Bharat Electronics Limited. During his professional tenure of about four decades, he has steered the development and execution of large defence projects and complex information technology based national e-governance projects such as electronic voting machine, biometrics for national population register and smart cards.
M. N. Venkatesan is an independent director on the board of directors of the Investment Manager. He has more than 36 years of experience as a chartered accountant, including as the statutory central auditor of large public sector banks.
Historical Financial-
As PGInvIT has been newly created, it has no historical financial data. However, its initial portfolio assets (SPV) combined financial are strong.
| Parameters(billion) | 9MFY21 | FY20 | FY19 |
| Revenue from operation | 9.92 | 13.24 | 9.77 |
| Total Income | 10.1 | 13.34 | 9.84 |
| PBT | 5.48 | 4.87 | 3.48 |
| Net Profit | 3.37 | 3.39 | 2.48 |
| Parameters | Amount(billion) |
| Total Debt | 49.99 |
| Equity Share Capital | 12.13 |
| Reserves | 2.75 |
| Total unit holder's Fund | 14.88 |
| Debt equity ratio | 3.36 |
The objective of the Issue:
Fresh Issue
The Offer Proceeds will be utilised towards providing loans to the Initial Portfolio Assets for repayment or pre-payment of debt, including any accrued interest, availed by the initial portfolio assets and general purposes.
OFS
To carry out the disinvestment by the selling unitholders.
Business Overview
The sponsor of PGInvIT is Power Grid Corporation (PGCIL) which is the largest power transmission company in India in terms of length of transmission lines measured in circuit kilometres. PGCIL is engaged in project planning, designing, financing, constructing, operating, and maintaining power transmission projects across India and undertakes operations in the Indian telecom infrastructure sector. Therefore, PGInvIT is likely to receive significant parentage support from PGCIL in terms of both managerial experiences and business strategies. Its initial portfolio assets comprise grid strengthening links, generation linked assets, and assets linked with inter-regional power flow covering states of Himachal Pradesh, Maharashtra, Andhra Pradesh, Madhya Pradesh and Telangana which affirms its significance in power transmission and linkage. Going ahead, the trust is likely to achieve stable distributions for its unitholders by focusing on owning power transmission assets, low operating risks, and consistent and stable cash flows that has been exhibited from the characteristics its Initial Portfolio Assets.
In the wake of long-term growth of the domestic power sector, various policies and investment plans of the Government of India, such as the target for 175 GW cumulative renewable power installed capacity by the year 2022, the Draft National Energy Policy (2017), National Infrastructure Pipeline, proposed amendment to Electricity Act, 2003 and Aatmanirbhar Bharat Scheme, this will provide a very good opportunity for PGInvIT for its growth and business expansion for a long-term purpose.
Dividend distribution to Unit holders
The Trust shall distribute at least 90% of the distributable Income to the unit-holders not less than once in six months in every financial year.
Structure of InvIT
An InvIT is established as a trust and is registered with the SEBI. Typically, infrastructure investment trust comprises 4 elements as given below:
- Trustee: They are required to be registered with SEBI as debenture trustees. Also, they are required to invest at least 80% into infra-assets that generate steady revenue.
- Sponsor: A body corporate, LLP, promoter or a company with a net worth of at least Rs. 100 crore classifies as a sponsor.
- Investment manager: As a body corporate of LLP, an investment manager supervises all the operational activities surrounding InvITs.
- Project manager: The authority is mostly responsible for executing projects. However, in the case of PPP projects, it serves as an entity that also supervises ancillary responsibilities.