It’s IPO call for the PSU power ‘Maharatna’, Powergrid Corporation of India, which prepares to go public on April 29, 2021. The proposed IPO size of Rs 7,734,99 crores contains prime components worth Rs 4,500 crores. The rest of Rs 2,741.50 crore is OFS units.
Powergrid Corporation of India Limited is a PSU that belongs to schedule ‘A’ ‘Maharatna’ companies. The company was incorporated in 1989 under the Companies Act of 1956. The government of India is the primary stakeholder in the company with 51.34 percent, while the rest is split between public and institutional investors.
The PSU is a critical player in India’s power distribution system, primarily engaged in the planning, developing, and coordinating interstate power distribution and transmission. Being one of the biggest transmission units in the world, the company aims to provide uninterrupted power deployment across the nation with 99 percent efficacy. They are a strategic PSU crucial for India’s power deployment.
It is the first time for a PSU to issue an InvIT IPO.
InvIT IPO is different from regular IPO shares. It is more like a mutual fund scheme. It is a form of collective investment from individual and institutional investors in which the company invests the funds directly into infrastructure projects to generate a small income for investors.
Powergrid Corporation will be the third company (and first among public sector units) to launch InvIT. The market has witnessed two InvIT from the private sector before, IRB Infra InvIT and IndiGrid InvIT.
Power Grid India InvIT will function as an investment trust with a focus to own, construct, operate, maintain, and invest in infrastructure permissible under InvIT Regulation, including power transmission in India. They will work as the project manager of the InvIT.
Before the offer opens for subscription, let’s look at the highlights of the InvIT IPO.
The Power Grid India is a critical player in India’s power development, transmission, and deployment. Despite the rising cases of COVID-19 in the country, the power grid section remained well insulated in the crisis and registered strong growth in the troubled time. It has prompted the market to maintain a positive outlook towards the InvIT.
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