IPO-Note POWERGRID InvIT
Rs-99-Rs 100 per Equity share Recommendation: Subscribe
Security Type Mode of Payment will be ASBA only

Company Profile: –

POWERGRID Infrastructure Investment Trust (“PGInvIT”) is an InvIT set-up to own, construct, operate, maintain and invest as an infrastructure investment trust including in power transmission assets in India. Their Sponsor and Project Manager Power Grid Corporation of India Ltd. is a CPSE under the Ministry of Power. The trust’s initial portfolio assets will have five assets which are 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) which all are completed and revenue generating projects. The trust will own 74 percent of shareholding in each of the 5 TBCB (Tariff Based Competitive Bidding) projects, and the remaining 26 percent stake will be acquired through debt (from Power Grid) after the lock-in period that ended by 2024.

Issue Details
Objects of the issue Provide loans to the Initial Portfolio Assets for repayment or pre-payment of debt, including any accrued interest,

availed by the Initial Portfolio Assets; and To meet general corporate purposes.

Issue Size Total issue Size -Rs. 7735 Cr.

Fresh Issue – Rs 4993 Cr.

Offer for Sale – Rs. 2741 Cr.

Face value  

Rs.10 Per Equity Share

Issue Price Rs. 99 – Rs. 100
Bid Lot 1100 shares
Listing at  

BSE, NSE

Issue Opens: 29th April, 2021 – 3rd  May, 2021
Institutional 75% of Net Issue Offer
Non-institutional 25% of Net Issue Offer
Sponsor Power Grid Corporation of India Ltd
Investment Manager POWERGRID Unchahar Transmission Ltd
Trustee IDBI Trusteeship Services Ltd

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Monthly-Stock-Picks-February-2021

Strengths:

  • Strong lineage and support from the Sponsor and Project Manager
  • Consistent and stable cash flows from assets with long term visibility and low counter party risk
  • Strong financial position with strong growth in Top line and Bottom Line
  • Government support and an established regulatory framework

Key Highlights:

  • The company intends to distribute at least 90% of the net cash available for distribution to unitholders once at least every quarter in every financial year. However, the first declaration of distribution by the Trust shall be made within six months from the listing and trading of units pursuant to the offer
  • It Has been given a credit rating AAA/Stable by ICRA Limited, CARE Ratings Limited and CRISIL Ratings Limited.
  • Following utilization of the Offer Proceeds consolidated borrowings and deferred payments net of cash and cash equivalents will be below 49% of the total value of our assets.

Financial Performance:

Financial-Performanc-power

Shareholding Pattern:

Shareholding Pattern Pre- Issue Post Issue
Sponsor 100% 26%
Trust 74%
Source: RHP, EWL Research, Moneycontrol

Check Powergrid Infrastructure Investment Trust IPO Allotment Status

Powergrid Infrastructure Investment Trust IPO allotment status would be available soon after the IPO closure date. Usually the allotment comes within a week from the closing date which in this IPO yet to be announced.

One can check the allotment on the given below link with PAN number or Application number or DP Client Id. All you need to do is to follow these steps:-

  1. To  Powergrid Infrastructure Investment Trust IPO Allotment Status
  2. Go to Application Status
  3. Select IPO as Powergrid Infrastructure Investment Trust
  4. Enter your PAN Number or Application Id or DP Client Id.

 

Powergrid Infrastructure Investment Trust IPO

Application Form

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Risk Factors:

  • Trust was set-up on September 14, 2020 and does not have an established operating history.
  • Transmission charges under the TSAs are generally fixed, we may not be able to offset increase in costs.
  • May not be able to make distributions to Unitholders comparable to Unitholders estimated or anticipated distributions or at all.

Outlook:

POWERGRID Infrastructure Investment Trust proposed to acquire five projects initially with a total network of 11 power transmission lines of approximately 3,698.59 ckm (circuit km) and three substations having 6,630 MVA of aggregate transformation capacity across five states in India. The Initial Portfolio Assets of the Power Grid InvIT were awarded to Power Grid Corporation under the TBCB mechanism on a build-own-operate-maintain (BOOM) basis. The company derive revenues for electricity transmission from contracted transmission charges which are fixed for a period of 35 years hence there is minimal price risk arising from transmission charge resetting and will provide stability and consistent cash flow. Based on the upper price band of Rs.100, it will issue approx. 773499100 units.  Power Grid InvIT management has projected an average cash flow of Rs11.5bn per annum over the next 3 years this implies an attractive yield of 11-12% which is higher than FD rates. We would recommend investors subscribe to the IPO.

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