Power Grid to launch InvIT IPO on April 29

State-owned Power Grid Corporation of India (PGCIL) to launch its Infrastructure Investment Trust (InvIT) on April 29.

PowerGrid, in a regulatory filings with Securities and Exchange Board of India (SEBI), said that its issue comprises Rs 4,994 crore of fresh issuance and an offer for sale, the amount of which was undisclosed.

It said, “The selling unitholder will be entitled to the proceeds of the offer for sale and the proceeds received from the offer for sale will not form part of the offer proceeds. The trust will not receive any proceeds from the offer for sale.”

According to PowerGrid, the proceeds of the fresh issue in PGInvIT will be up to Rs 4993.5 crore and will be utilised towards providing loans to the Initial Portfolio Assets for repayment or pre-payment of debt, including any accrued interest, availed by the Initial Portfolio Assets; and general purpose. 

“The Investment Manager believes that providing of loans to the Initial Portfolio Assets, and the subsequent pre-payment or scheduled repayment of the loans availed by the Initial Portfolio Assets will help reduce outstanding indebtedness of the Trust on a consolidated basis and assist the Trust in maintaining a favourable debt-equity ratio, which will enable the Trust to raise further resources in the future to fund potential business development opportunities and plans to grow and expand its business in the future thereby enabling the Trust to meet its commitment towards distributions to unitholders,” PowerGrid said in the filings.

The offer will close on May 3. The Union Cabinet in September 2020 approved monetisation of assets of PGCIL through the InvIT model.