Power Grid InvIT's Rs 7,735-Crore IPO Opens On April 29
High voltage electricity power lines hang from pylons to supply the city grid. (Photographer: Casper Hedberg/Bloomberg)

Power Grid InvIT's Rs 7,735-Crore IPO Opens On April 29

India’s largest initial public offering by an infrastructure investment trust opens for subscription on April 29.

Power Grid Corp.’s InvIT, first by a public sector company, plans to raise Rs 7,735 crore, K Sreekant, chairman and managing director at Power Grid, said in an interview with BloombergQuint. That comprises a fresh issue of worth up to Rs 4,993.5 crore and existing investors offering units worth up to Rs 2,741.5 crore, he said.

The InvIT by the nation’s largest power transmission utility will house 11 transmission lines and three substations.

Cash flow from operations of these assets is estimated at Rs 1,150 crore for the first three years, Sreekant said. The InvIT has a very strong yield pick-up potential, he said.

There is an opportunity to fund the growth through debt and increase leverage since there is no debt on the InvIT, he said. That, according to him, will improve yields.

Sreekant said InvIT assets shall distribute at least 90% of each of their net distributable cash flow to the trust; and the trust shall distribute at least 90% of the distributable income to the unitholders.

Watch the full interview here:

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