Powergrid Invit background
POWERGRID Infrastructure Investment Trust (“PGInvIT”) is an InvIT set-up to
own, construct, operate, maintain and invest as an infrastructure investment
trust as permissible in terms of the InvIT Regulations, including in power
transmission assets in India. They were registered with SEBI as an InvIT on
January 7, 2021. Their Sponsor, Power Grid Corporation of India Ltd., also acting
in the capacity of their Project Manager, is a CPSE under the Ministry of Power,
GoI and is listed on BSE and NSE. Their Sponsor was conferred with ‘Maharatna’
status on October 23, 2019 by the GoI. As of March 31, 2019, their Sponsor was the
3rd largest CPSE in terms of gross block as per the Public Enterprises Survey
2018-19 issued by the GoI, Ministry of Heavy Industries and Public Enterprises,
Department of Public Enterprises in February 2020.
Key Highlights of Powergrid invIT
The Initial Portfolio Assets comprise five power transmission projects
located across five states of India. The projects comprise 11 transmission
lines, including six 765 kV transmission lines and five 400 kV transmission
lines, with a total circuit length of approximately 3,698.59 ckm, and three
substations with 6,630 MVA of an aggregate transformation capacity and
1,955.66 km of optical ground wire.
The Assets were awarded under the Tariff Based Competitive Bidding (TBCB)
mechanism on a build-own-operate-maintain (“BOOM”) basis with a long-
term Transmission Service Agreement (TSA) of 35 years from the COD. The
average remaining term of the TSAs is over 32 years.
By carrying out required renovation works, the useful life of transmission
assets can be extended up to 50 years and upon expiry of the term of a TSA,
PGInvIT can apply to regulators for renewal if it is not unilaterally extended.
They intend to distribute at least 90% of the net cash available for
distribution to their Unit-holders once at least every quarter in every
financial year. However, the first declaration of distribution by the Trust
shall be made within 6 months from the listing and trading of units pursuant
to the Offer.
The Sponsor (jointly with its nominees) presently holds 100% of the equity
shareholding of each of the Initial Portfolio Assets. Prior to the Allotment,
the Trust, acting through the Trustee, proposes to acquire from the Sponsor,
and the Sponsor proposes to transfer to the Trust in exchange for Units, the
equity shareholding of each of the Initial Portfolio Assets