IndiGrid InvIT Lists Marginally Lower Than Its Issue Price
IndiGrid is India’s second InvIT to list on the exchanges.
India Grid Trust, an infrastructure investment trust (InvIT) sponsored by Sterlite Power Grid Ventures Ltd., listed at a discount of 0.3 percent on the National Stock Exchange. The share listed at its issue price of Rs 100 on the Bombay Stock Exchange.
The Delhi-based company managed to raise around Rs 2,250 crore through its initial public offering. It is the second InvIT to get listed after IRB InvIT Fund, which had raised Rs 5,040 crore. InvITs are mutual-fund like instruments that pool in infrastructure projects to raise funds from investors.
Other infrastructure companies like MEP Infrastructure Developers Ltd. and Reliance Infrastructure Ltd. have already filed or is in the process of doing so with the market regulator.
The initial public offering (IPO) had been subscribed nearly 1.35 times. Institutional investors had subscribed 1.14 times the shares on offer. Demand from non-institutional investors was subscribed the most by 1.57 times, showed the information uploaded on the NSE website.
60 percent, or Rs 1,600 crore, of the IPO proceeds will be used to pare its external debt of Rs 2,600 crore in the two transmission projects housed under the trust. The promoter would get Rs 650 crore to repay part of its around Rs 900-crore debt.
The InvIT has two projects operational with estimated cash flow of Rs 372.46 crore in the current financial year.
Harsh Shah, CFO at Sterlite Power said the company does not face regulatory overhangs unlike typical transmission assets. “Our contracts are fixed for next 35 years. Therefore, there is no regulatory reset coming in for any of our project,” he told BloombergQuint in an interview.
Shah said the company plans to distribute around Rs 295 crore every year for the next three financials years as dividend to unitholders.
After the lukewarm listing, shares of declined as much as 6.3 percent to Rs 93.70 on the NSE.