14 May , 2021 By : Kanchan Joshi
Shares of PowerGrid Infrastructure Investment Trust (InvIT) listed 4% premium on Friday after its initial public offering was subscribed 4.83 times last week.
At 10.29am, PowerGrid Infra shares were trading 3.8% lower from their issue price, at Rs103.82 on BSE, while the benchmark 30-share Sensex gained 0.04% to 48,713.50 points.
PowerGrid Infra shares opened at Rs104 on Friday, compared with the issue price of Rs100 per share. Earlier in the day, they touched a high of Rs104.97 and a low of Rs103.66.
The InvIT is raising Rs7,735 crore via a public issue by issuing fresh shares worth Rs4,993.48 crore and an offer for sale of Rs2,741.50 crore by PowerGrid.
As per management projections, Powergrid InvIT is likely to generate cash flow from operations at an average of Rs1,170 crore over the next three years, which implies a 10?sh flow yield.
Many brokerage firms have recommended subscribe rating to the IPO given competitive advantage of its sponsors, consistent and stable cash flow, strategic and critical nature of power transmission business and strong financial positioning.
The issue received bids for 2.05 billion equity shares against the issue size of 425.43 million shares, according to stock exchange data. At the upper end of the Rs100 price band for the issue, the issue drew bids worth roughly Rs20,547 crore
An infrastructure investment trust is a quasi-debt instrument that provides investors with a steady yield derived from cashflows from operating infrastructure projects such as roads, transmission lines or renewable energy projects. Publicly traded InvITs, like the one proposed by Power Grid can also offer an equity upside to investors.
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