PowerGrid InvIT IPO
A) What is InvIT?
1) An investment trust is something that has assets under its management and generates revenues from those assets and returns to the stakeholders or in this case, InvIT unitholders.
2) One of the most important factors underlying an investment trust is the underlying assets it owns.
3) They could be toll gates, transmission lines, rental buildings, and other investment yielding platforms.
B) When does PoweGrid InvIT Formed?
PowerGrid has registered an InvIT on 07.01.2021. This yield vehicle instrument has transmission lines and substations as its assets. It generates money through these transmission lines.
C) Why this IPO is coming and how investors will earn?
Here, PowerGrid has transferred 5 project assets to PowerGrid InvIT. Now, to pay the debt of these transmission assets, PowerGrid InvIT needs money. That is why they are coming up with an IPO to raise money to pay off the debt of these assets.
These assets will get rental income from PowerGrid. This income then will be distributed among the investors in the form of dividends. A simple mechanism is we (consumers) pay money to the PGCIL and it pools the money and distributes it to the various managers of the substations and in turn, PowerGrid InvIT pays to its shareholders the interest, which it calls DPU or distribution per unit.
Initially, PowerGrid InvIT has acquired five projects with a total network of 11 power transmission lines of approximately 3,698.59 ckm and three substations having 6,630 MVA of aggregate transformation capacity, as of December 31, 2020, across five states in India.
D) What is the minimum size of investment?
This is not the regular IPO where retail investors can put Rs.15000 application. The minimum ticket size is somewhere around 1 lakh.
QIB Quota = 75%
HNI Quota = 25%
E) Shareholding Pattern Post-listing
F) Video to understand basics of InvIT
G) Video to understand Yield and Chances of Allotment
H) Video to understand how investors of PowerGrid InvIT will earn money?
Objects of the PowerGrid InvIT IPO:
|Name of the asset||Amount|
PowerGrid InvIT IPO Details:
|Open Date:||Apr 29 2021|
|Close Date:||May 03 2021|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Book Building|
|Issue Size:||7734 Cr.|
|Lot Size:||1100 Shares|
|Issue Price:||₹ 99-100 Per Equity Share|
|Listing Date:||May 11 2021|
Promoters And Management:
Financials of PowerGrid InvIT IPO:
|Year||Revenue||Finance cost||Other expenses||PAT||Shares||EPS|
|Expected cash flows|
|POWERGRID Vizag Transmission Ltd||260||225||201|
|POWERGRID Kala Amb Transmission Ltd||65||61||56|
|POWERGRID Parli Transmission Ltd||308||308||307|
|POWERGRID Warora Transmission Ltd||343||343||342|
|POWERGRID Jabalpur Transmission Ltd||242||242||242|
Comparison With Peers:
|Company||Revenue (cr)||Asset Size (cr)||Circuit (Km)||No. of transmission lines||Mcap|