Power Grid InvIT IPO - Dolat Capital’s Investment Rationale
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Dolat Capital Report
Power Grid Investment Trust is a good option for yield investors who can expect a 11-12% yield arising from stable cash flows.
The valuations indicate a price to book of 3.5 times, as compared to Power Grid Corporation of India Ltd. price-to-book of 1.6 times.
However, the InVIT has superior 20% plus return on equities compared to the average return on equity of 15% for Power Grid.
From a Powergrid perspective, the higher price-to-book of the InVIT which translates into a higher book, would mean an addition of approximately Rs 7 to its fair value.
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