Last updated: 30 Apr, 2021 | 05:46 am
PowerGrid InvIT is set to raise up to Rs 7,735 crore via IPO which opened on Apr 29th, Thursday. Here are the details:
About PowerGrid InvIT
Expected yield and key risks
About the issue
Issue open: - 29th April 2021
Price band: Rs 99- 100 per share
Issue Size: Rs 7,735 crore (Gross)
Issue Size: The InvIT IPO comprises a fresh issue of up to Rs 4,993.5 crore and existing investors offering units worth up to Rs 2,741.5 crore.
Reservation for QIB: 60% , Retail - 15%, Non institutional Investors -25%.
Bid lot: 1,100 units, and in multiples thereof
At the higher end of the price band, PowerGrid InvIT is available at a cash flow yield of 11% and a 1% premium to its NAV value. Closest peer Sterlite Power-sponsored IndiGrid is trading at a 9% yield with a 9% premium to its NAV value. Hence, the issue seems to be reasonably valued.
Given the competitive advantage of Powergrid (sponsor), consistent and stable cash flows over the last three years, strategic business (power transmission), healthy debt ratios, stable margins and return ratios, we remain positive on the prospects of the issue.