PowerGrid InvIT garners Rs 3,480 cr from anchor investors ahead of IPO

PowerGrid Infrastructure Investment Trust on Wednesday raised a little over Rs 3,480 crore from anchor investors ahead of its initial public offer, which opens for subscription on Thursday.

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 BSE website.

Among the anchor investors are 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.

PowerGrid Infrastructure Investment Trust (PowerGrid InvIT) is owned by state-owned PowerGrid Corporation of India.

This will be the first Infrastructure Investment Trust (InvIT) in the country to be floated by a public sector company.

The IPO comprises fresh issue of shares worth Rs 4,993.48 crore and offer for sale to the tune of Rs 2,741.50 crore by selling shareholders.

It has fixed a price band of Rs 99-100 per unit for its Rs 7,735 crore IPO, which will open for public subscription on April 29 and close on May 3.

The PowerGrid InvIT units are proposed to be listed on the National Stock Exchange and the BSE.

InvITs are instruments on the pattern of mutual funds and are designed to pool small sums of money from a number of investors to invest in assets that give cash flow over a period of time.

The proceeds from the offer will be utilised for providing loans to the initial portfolio assets for repayment or pre-payment of debt, including any accrued interest, and for general purposes.

The trust's initial portfolio will have five assets -- 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).

PowerGrid InvIT has been set-up to own, construct, operate, maintain and invest as an infrastructure investment trust as permissible in terms of the InvIT Regulations, including in power transmission assets in India.

ICICI Securities, Axis Capital, Edelweiss Financial Services and HSBC Securities and Capital Markets (India) are the lead managers for the offer.

While markets regulator Sebi first notified the regulations for InvITs and REITs (Real Estate Investment Trusts) in 2014, only a few such trusts have listed their units in the country so far.

The regulator has extended various relaxations for listing of these trusts and such trusts are popular in some advanced markets.