In chat with Anil Singhvi, PowerGrid management speaks on InvIT, operational assets and more
Zee Business Managing Editor Anil Singhvi says that PowerGrid started operations from as far back as 1989. This is a Maharatna company of the Government of India. It is also India’s largest power transmission company with 85% market share. On top of that, it is the world's 3rd largest power utility company
Zee Business Managing Editor Anil Singhvi says that PowerGrid started operations from as far back as 1989. This is a Maharatna company of the Government of India. It is also India’s largest power transmission company with 85% market share. On top of that, it is the world's 3rd largest power utility company.
Singhvi said that PowerGrid Infrastructure Investment Trust (“PGInvIT”) was formed on September 14, 2020 by the sponsor, Power Grid Corporation of India Ltd. PowerGrid InvIT IPO date of opening is Thursday, 29th Apr’2021 and closes on Monday, 3 rd May’2021.
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K Sreekant, CMD of PowerGrid said that this is the first, biggest InvIT of a Maharatna Government company. The operational assets of the company will be monetized with this InvIT. The Government of India is following the strategy of Asset recycling to attract foreign Investment and other funds into the country.
InvIT के जरिए ऑपरेशनल एसेट्स को मोनेटाइज करेगी पावर ग्रिड...#NewsParViews में कंपनी के CMD के श्रीकांत ने कहा- जुटाई रकम से कर्ज घटाने में मिलेगी मदद#PowerGrid @AnilSinghvi_ @pgcilindia pic.twitter.com/EBW4rvO6uY
— Zee Business (@ZeeBusiness) April 28, 2021
Sreekant said that it is value accretive for shareholders of the company. The Development risk, taken by the company to develop the operational assets before flipping, which generate premium, will benefit company’s shareholders.
Sreekant said that the total size of the issue is Rs 7735 cr. Out of this fresh issue is Rs 4994 cr and OFS is Rs 2742 cr. Some money will be deployed in construction projects. Notaby, he said that the capacity of renewable energy will multiply 5 times to 450 GW from 90 GW going forward.
He also revealed that some funds will be used to deploy in transmission schemes for renewable energy projects.
Sreekant said the performance of these operational assets is remarkable in the last 2 to 4 years. Tariffs are already decided as they have agreements for 35 years.
As far as investors are concerned, he said that returns would be predictable and stable.
Investors who want to avoid development risk and want steady returns, then this is an excellent opportunity for them.
Sreekant said that the pace of debt increase will slow down but there is no purpose to reducing debt of the company. He said that InvIT units are hybrid instruments; they are neither pure equity nor pure debt. This product is extremely good for investors who are aware about it. They can give return of more than AAA rated Bond. Operational risk is attached with these units and give better returns than debt and are nor as risky as equity.
Sreekant said retail Investors should participate if they want greater returns than what Debt Instruments offer and who want to avoid risky assets like Equities.
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