Review By Dilip Davda on May 11, 2017
After the grand success of the first instrument in infra finances InvIT by IRB InvIT which was from the road infrastructure segment, we have yet another InvIT from the power grid sector under power infra segment. Sterlite Power Grid Ventures Ltd and Sterlite Investment Managers is the sponsor and investment manager for India Grid Trust that proposes to offer “IndiGrid” InvIT having a face value of Rs. 100 each with a price band of Rs. 98-100. Issue opens for subscription on 17.05.19 and will close on 19.05.17. India Grid Trust has planned to raise Rs. 2250 crore with this issue to repay the debt to the tune of Rs. 1600 crore and the rest for other investment purpose. Minimum application is to be made for 10205 units and in multiples of 5103 units thereon, thereafter. Trust will allot not more than 75% of the issue on proportionate basis to Institutional investors in case of oversubscription. Issue is lead managed by Morgan Stanley India Co. Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Edelweiss Financial Services Ltd. Karvy Computershare Pvt Ltd is the registrar to the issue. Axis Trustee Services Ltd is the Trustee of IndiGrid. This issue will constitute at least 25% of the outstanding Units of IndiGrid on a post-issue basis. Post allotment, units will be listed on BSE and NSE.
IndiGrid is an infrastructure investment trust (InvIT) established to own interstate power transmission assets in India. IndiGrid has been given the corporate credit rating of AAA/Stable by Crisil, ” IrAAA”/Stable by ICRA and IND”AAA”/Stable by India Ratings. Sponson Sterlite Power Grid Ventures Ltd is one of the leading independent power transmission companies operating in the private sector, with extensive experience in bidding, designing, financing, construction and maintaining the power transmission projects across India. It owns 11 inter-state power transmission projects with a total network of 30 power transmission lines of approx. 7733 ckms and nine substations having 13890 MVA of transformation capacity. Some of these projects have been fully commissioned, while others are at different stages of development.
IndiGrid will undertake activity as an infrastructure investment trust in accordance with the provisions of the InvIT Regulations and the Trust Deed. Of the 11 interstate power transmission projects owned by the Sponsor, IndiGrid will initially acquire two projects i.e Bhopal Dhlle Transmission Co. Ltd and Jabalpur Transmission Co. Ltd with a total network of eight power transmission lines of approx. 1936 ckms and two substations having 6000 MVA of transformation capacity across four states. These projects are revenue generating for more than a year. IndiGrid InvIT units will have tenure of up to 35 years and as the trust will distribute 90 per cent of its cash generation to unit holders at least twice a year, this instrument is providing lucrative yield for a longer tenure. These units have no major risk factors in the current environment and higher spending plans of the government for the power sector.
Based on the offer document data, it can pay a minimum of 10.9% return for initial periods which will increase further based on its income and cash generation. Trust will need prior approval of the unit holders at the time of any purchase / divestment of assets, thus it will provide transparency.
Conclusion: As power transmission segment is considered as the safe investment asset globally, these units will provide handsome rewards in medium to long term. Investors may consider investment in IndiGrid InvIT that has good ratings for corporate credit ratings.
Review By Dilip Davda on May 11, 2017
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of IndiGrid Infrastructure Trust offers an early investment opportunity in IndiGrid Infrastructure Trust. A stock market investor can buy IndiGrid InvIT InvIT shares by applying in IPO before IndiGrid Infrastructure Trust shares get listed at the stock exchanges. An investor could invest in IndiGrid InvIT InvIT for short term listing gain or a long term.
Read the IndiGrid InvIT InvIT recommendations by the leading analyst and leading stock brokers.
IndiGrid InvIT InvIT offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the IndiGrid InvIT InvIT Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is IndiGrid InvIT InvIT?"
Our recommendation for IndiGrid InvIT InvIT is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the IndiGrid InvIT InvIT.
The IndiGrid InvIT InvIT allotment status will be available on or around May 16, 2017. The allotted shares will be credited in demat account by [.]. Visit IndiGrid InvIT InvIT allotment status to check.
