PowerGrid InvIT IPO: Opens today; find key details before investing

PowerGrid Infrastructure Investment Trust (InvIT) IPO will open for subscription today, i.e. Thursday, April 29, 2021. This is the first InvIT to be sponsored by a state-run firm.

The company is looking to raise Rs 7,735 crore through the issue which will comprise fresh issues worth Rs 4,993.48 crore and the offer for sale (OFS) of existing units worth Rs 2,741.50 crore.

Units of PowerGrid InvIT will be sold in a price band of Rs 99-100 per unit, in a bid lot of 1,100 units per lot. This would translate to a minimum investment of Rs 1.1 lakh per investor. The issue has been reserved 75 per cent for institutional investors and the remaining 25 per cent for non-institutional investors. The public issue will close on May 3, 2021.

The net proceeds from the fresh issue offer will be utilised for 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 for general corporate purposes.

IDBI Trusteeship Services Limited is the trustee, while PowerGrid Corporation of India is the sponsor of the issue. PowerGrid Unchahar Transmission is the investment manager. ICICI Securities, Axis Capital, Edelweiss Financial Services and HSBC Securities and Capital Markets (India) are the lead managers to the offer.

An infrastructure investment trust (InvIT) works like a mutual fund. It is an investment vehicle that allows individuals and institutions to invest in infrastructure assets such as roads, power transmission lines, etc to earn a small portion of the income as a return over a period of time.

PowerGrid InvIT has been set up to own, construct, operate, maintain and invest as an infrastructure investment trust, in power transmission assets in India. PowerGrid Infrastructure Investment Trust (PowerGrid InvIT) is owned by the state-owned PowerGrid Corporation of India.

Besides, PowerGrid Infrastructure Investment Trust on Wednesday raised a little over Rs 3,480 crore from anchor investors ahead of its initial public offer. It has been decided to allocate 34,80,74,100 units at Rs 100 apiece to 47 anchor investors, aggregating the total to Rs 3,480.74 crore, according to a circular uploaded on the BSE website.

The anchor investors include SBI Mutual Fund (MF), HDFC MF, Tata MF, Fidelity Funds, Tata AIA Life Insurance Company, Tata AIG General Insurance Company, SBI Life Insurance Company, UTI MF, ICICI Prudential MF, Sundaram MF, Rainbow Investments Ltd and CPP Investment Board Private Holdings.