On its maiden day of trading, shares of PGlnvlT, the infrastructure investment trust (InvIT) sponsored by state-run electricity transmission utility Power Grid Corporation of India (PGCIL), closed at 2.98% above the issue price of Rs 100 on the BSE.
It reached the highest point of 4.97% premium in the day, while the lowest was 2.84%. The closing price of Rs 102.98 was, in fact, 0.98% lower than the opening price of Rs 104 per share. PGCIL is seeking to monetise some of its transmission assets through PGInvIT, which will contribute to the government’s asset monetisation programme. At Friday-end, PGInvIT’s market capitalisation was at Rs 9,371.2 crore.
This is the first time a PSU in the power sector has monetised its assets through the InvIT model. After the Cabinet approved the monetisation of PGCIL assets in September 2020, the company had transferred 74% of its shareholding in five operational transmission systems in the InvIT.
PGCIL’s chairman and managing director K Sreekant had said earlier that as many as 18 other transmission projects worth Rs 22,500 crore being built by the company through the tariff-based competitive bidding route could also be monetised in due course through PGInvIT.
The initial public offer was opened on April 29 and closed on May 3. The InvIT will be distributing 90% of the net cash available for distribution to unitholders once every quarter in every financial year. All assets under PGInvIT have 35 years of transmission service agreement with their respective customers, and their revenue flows are insulated from demand, supply and price fluctuation of power tariff. Analysts had pointed that the InvIT could provide yield of 11–12% in initial years.