Power Grid may rise 10% ahead of InvIT offer

MUMBAI: The shares of Power Grid Corp could gain as much as 10 per cent more ahead of the launch of Power Grid Infrastructure Investment Trust's (InvIT) initial public offering. Analysts believe that the InvIT launch could entail an additional dividend payout of ₹4 to ₹5 per share along with PowerGrid's March quarter result.

"We believe ahead of the InvIT launch we can see rally in stock led by short covering... the bullish reversal pattern near the current support levels would lead the stock towards the 230-235 levels," said Abhilash Pagaria, senior manager, Edelweiss Alternative Research. Shares of Power Grid, which rose 2.2 per cent to close at ₹215.75 on Monday, are down 5 per cent since February 16 when the benchmark indices hit a record high. The Sensex is down 7 per cent from that date.

Rajesh Palviya, head-technicals and derivatives at Axis Securities, said the stock may see possible upside till ₹225-235. "One can buy with a stop loss of ₹200. Put writers are confident that the stock will move up," said Palviya.

The InvIT is a recycling capital platform and every year Power Grid will monetize its assets, making it a combination of growth and dividend yield play, said Edelweiss.