India Grid Trust, an infrastructure investment trust (InvIT) sponsored by Sterlite Power Grid Ventures, made its entry on the stock exchanges today.  It was expected to list at a discount and it did – as against the IPO price of Rs.100, it got listed on the BSE at exactly the same price of Rs.100 to slip immediately and on the NSE, it got listed at a discount – at Rs.99.70.

The IPO had got a lukewarm response when it opened for subscription; it was subscribed just 1.17 times.

IndiGrid InvIT is a Special Purpose Vehicle (SPV) established in Oct 2016 to acquire 2 inter-state revenue-generating power transmission assets, Bhopal Dhule Transmission Company Ltd (BDTCL) and Jabalpur Transmission Company Ltd (JTCL), comprising 8 power transmission lines of 1,936 circuit kms and two substations of 6,000 MVA transformation capacity across 4 states, from its sponsor, Sterlite Power Grid Ventures Limited, a leading independent power transmission company with 29% market share in Tariff Based Competitive Bidding (TBCB) system, and owned 72% by Sterlite Power Transmission Ltd and 28% by Standard Chartered Private Equity.

In our IPO Analysis, we had said, “InvIT is quasi-debt mixed with some equity risk. However holding period for computation of capital gain, at 3 years, is similar to debt instruments vis-a-vis listed equity qualifying for long term capital gain at 1 year. Since InvITs are structurally designed to suit institutional investors or ultra HNIs, looking to maximise gains from fixed return instruments, one can consider this issue with a long term horizon.”