Indian transmission firm Power Grid to file draft papers for $1b InvIT

Power grids. Photo: Fré Sonneveld/unsplash

Electricity transmission company Power Grid Corp. of India Ltd plans to file a draft prospectus for a $1 billion infrastructure investment trust (InvIT) by June-end, in the first InvIT offering from any state-owned company, two people aware of the matter said.

An InvIT is a pool of money collected from investors to run operational infrastructure projects in return for a regular yield to its unitholders.

The InvIT was proposed by the government as an alternative fundraising route for state-owned companies to manage their funding requirements without having to depend on government support. The National Highways Authority of India is also preparing to raise funds through this route.

“While COVID-19 slowed the work, the draft prospectus is expected to be ready for filing before the end of next month. Power Grid plans to raise between 6,000 crore and 8,000 crore through the InvIT. If it goes through, it will mark the first initial public offering of an InvIT by a state-owned company,” said one of the two persons mentioned above, both of whom spoke requesting anonymity.

An email sent to Power Grid on Monday remained unanswered.

The IPO of the Power Grid Infrastructure investment trust will only be the third such public offering in the Indian markets.

In May 2017, road developer IRB Infrastructure Developer Ltd launched the first IPO for an infrastructure investment trust—IRB InvIT fund raising 5,033 crore. In the same month, transmission projects developer Sterlite Power Grid launched the IPO of its infrastructure investment trust—India Grid Trust—raising 2,250 crore.

However, since then, there has been a lull in public offerings of InvITs, with issuers and investors opting for privately placed structures.

In 2018, Canadian pension fund manager Canada Pension Plan Investment Board (CPPIB) and Allianz Capital Partners, part of insurance giant Allianz, invested in L&T Infrastructure Development Projects Ltd’s infrastructure investment trust that holds operational road assets.

This article was first published on livemint.com.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.