PowerGrid Infrastructure Investment Trust (PGInvIT), an InvIT sponsored by the state-owned Power Grid Corporation of India, will tap the capital market on April 29 for its initial public offering of fresh units to the tune of ₹4,995 crore.
Simultaneously, Power Grid will also sell units through an offer of sale for about ₹2,000 crore, taking the overall size of the public offering to about ₹7,000 crore, sources said.
The final offer document for this proposed offering – a first where a state-owned entity is monetising its infrastructure assets through the InvIT route – was filed with SEBI on Friday. While the amount to be raised by PGInvIT was specified as ₹4,995 crore, the offer of sale component amount has not been mentioned. Power Grid had filed the draft offer document for the InvIT in January this year.
This will be the fourth InvIT to be listed in the Indian markets. IRB InvIT (backed by infrastructure firm IRB Infra and affiliates of GIC); IndiGrid InvIT (backed by KKR and Sterlite Power Grid Ventures) and Indinfravit Trust (backed by L&T Infrastructure Development Projects) had already hit the capital market.
InvITs are investment instruments that work like mutual funds and are regulated by SEBI. Typically, such a vehicle is designed to pool money from several investors to be invested in income generated assets.
Budget fillip
InvITs are mostly structured as trusts and assets are held by an independent trustee on behalf of unit holders.
It may be recalled that in the recent Budget, Finance Minister Nirmala Sitharaman had emphasised the importance of asset monetisation in the infrastructure space through various models including the Infrastructure Investment Trusts (InVITs), Toll-Operate-Transfer (TOT) or monetisation of land banks.
The budget had confirmed proposals to transfer assets worth ₹12,000 crore from the National Highways Authority of India and Power Grid Corporation of India to their respective InvITs. The budget had also exempted tax deduction at source on dividends paid by InvITs. NHAI’s InvIT is also expected to hit the public market this fiscal.