PowerGrid InvIT IPO subscribed 59% on Day 2

NEW DELHI: Subscription for the IPO of the infrastructure investment trust, sponsored by the Power Grid Corporation of India, grew gradually on the second day of the bidding process on Friday. The issue was subscribed 59 per cent.

By 5:00 pm on Friday, the issue received bids for 25,17,42,700 units out of the 42,54,25,000 units on offer for subscription.

The InvIT has been touted as a good long-term option for investors looking for assured 10-12 per cent returns as analysts expect the InvIT to comfortably generate that much yield annually.

The infrastructure trust is a first of its kind offering by a state-owned entity in India and is priced at Rs. 99-100 per unit. Power Grid InvIT is looking to raise Rs 7,735 crore through the issue which includes a fresh issue as well as an offer for sale from the sponsor.

The infrastructure trust plans to acquire five projects initially from Power Grid with a total network of 11 power transmission lines of 3,698 kilometers and three substations having 6,630 MVA of aggregate transformation capacity across five states in India.

Analysts say investors can subscribe to the issue as it offers prospects of lucrative and consistent yields. “The product offers stability in cash flow, low counterparty risks, strong lineage of Power Grid Corporation and growth from future acquisition of projects. This coupled with replacement of Power Grid Corporation debt via IPO proceeds implies the InvIT will start out as debt-free,” said Rupesh Sankhe of Edelweiss Securities.