Power Grid Infrastructure Investment Trust has fixed a price band of Rs 99-100 per unit for its Rs 7,735 crore initial share sale, which will open for public subscription on April 29.
The issue will close on May 3 and the bidding for anchor investors will open on April 28, according to the company''s statement on Monday.
Free Press Journal had reported that the state-run Power Grid Corporation was likely to launch its first-ever InvIT (infrastructure investment trust) IPO next week, quoting news reports.
Here's what investors should know:
The IPO by a state-owned firm on April 29 will be a landmark deal for the Indian capital markets. Earlier in 2017, IRB InvIT and India Grid Trust went public.
Power Grid Infrastructure Investment (PowerGrid InvIT) is owned by state-run Power Grid Corporation of India. This will be the first Infrastructure Investment Trust (InvIT) in the country to be floated by a public sector company.
The initial public offer (IPO) comprises fresh issue of shares worth Rs 4,993.48 crore and Offer for Sale (OFS) to the tune of Rs 2,741.50 crore by existing shareholders.
Apart from anchor investors, all other bidders will be required to make a bid for a minimum of 1,100 units and in multiples thereafter. This would translate into a minimum investment of Rs 1.1 lakh for the upper end of the price band.
PowerGrid InvIT has reserved 75 percent of the issue for Institutional investors while only 25 percent is for non-institutional investors.
The proceeds from the offer will be utilised for providing loans to the initial portfolio assets for repayment or pre-payment of debt, including any accrued interest, and for general purposes.
“This is a big transaction and the size of the IPO is likely to be around Rs 7,700 crore, with a primary component of around Rs 4,500 crores and the balance making up the secondary component. The price band is likely to be announced on April 29,” said Moneycontrol quoting a source.
The InvIT will reportedly comprise of 11 power transmission lines owned and operated by Power Grid.
The trust's initial portfolio assets will have five assets -- PVTL (PowerGrid Vizag Transmission Ltd), PKATL (PowerGrid Kala Amb Transmission Ltd), PPTL (PowerGrid Parli Transmission Ltd), PWTL (PowerGrid Warora Transmission Ltd) and PJTL (PowerGrid Jabalpur Transmission Ltd).
PowerGrid InvIT has been set-up to own, construct, operate, maintain and invest as an infrastructure investment trust as permissible in terms of the InvIT Regulations, including in power transmission assets in India.
ICICI Securities, Axis Capital, Edelweiss Financial Services and HSBC Securities and Capital Markets (India) are the lead managers for the offer.
While markets regulator Sebi first notified the regulations for InvITs and REITs (Real Estate Investment Trusts) in 2014, only a few such trusts have listed their units in the country so far.
The regulator has extended various relaxations for listing of these trusts and such trusts are popular in some advanced markets.