PowerGrid InvIT shares end lower after listing at 4% premium to IPO price; becomes 3rd listed InvIT

PowerGrid Infrastructure Investment Trust (InvIT) shares made a debut at Rs 104 per share, up 4 per cent from the issue price of Rs 100 per unit. PowerGrid InvIT had a market capitalization of Rs 9,463.99 crore on the listing. PGInvIT shares ended at Rs 103, up 3 per cent from IPO price. This was the first Infrastructure Investment Trust (InvIT) in the country to be floated by a public sector company. PowerGrid InvIT issue was subscribed 4.83 times on the last day of the subscription. The Rs 7,735-crore issue received bids for 205 crore units against 42 crore units on offer. Upon listing, PowerGrid Infrastructure Investment Trust has become the third InvIT to be listed on the bourses after IndiaGrid Trust and IRB InvIT.

The issue comprised a fresh issue of shares worth Rs 4,993.48 crore and an offer for sale (OFS) to the tune of Rs 2,741.50 crore by selling shareholders. The portion reserved for the institutional investors saw a subscription of 4.63 times and other investors 5.07 times. PowerGrid Infrastructure Investment Trust (PowerGrid InvIT) is owned by the state-owned PowerGrid Corporation of India.

PowerGrid Infrastructure Investment Trust’s sponsor, Power Grid Corporation of India (PGCIL) was conferred with ‘Navratna’ status in 2008 and later upgraded to ‘Maharatna’ in 2019. It is the third-largest CPSE in terms of gross block and largest in terms of transmission lines length (ckms) having over 85 per cent market share in India’s cumulative inter-regional power transfer capacity. Many analysts feel that a Government-backed sponsor like PGCIL instills confidence. PG InvIT is AAA rated and at the issue price of Rs 100 per unit, offers a 12 per cent yield, trading at a spread of 600 bps to the 10 year G-sec (6.0%).

Those at Prabhudas Lilladher gave a ‘subscribe’ rating to the issue. They said that rating to the IPO has been given on the basis of competitive advantage of its sponsors, consistent and stable cash flow, strategic and critical nature of power transmission business and strong financial positioning. PGInVIT is an infrastructure investment trust (InvIT) established to own, construct, operate, maintain and invest in power transmission assets.