Here are more details about powergrid invit (BQ interview, CNBC interview):
- Issue size: 7734.9 cr. (2741 cr. offer for sale + 4993 cr. fresh issue)
- All underlying assets are operational (varying from 2-4 years)
- Good track record of availability (98%+)
- Asset life can be close to 50 years, tariff agreements are done for 35-years, residual life for the current Invit assets is 32 years
- Assets worth 23’500 cr. will be made available for monetization in the coming few years from powergrid, of these 5’000 cr. are currently operational and rest are under different stages of construction.
- The Invit will also be open to acquiring assets from other SPVs which are not sponsored by powergrid
- Average cashflow from operations of assets are estimated at ~1150 cr. in the first 3-years, 90% of this will be given to Invit of which 90% will be passed on to the unitholders
- Initial stage: No debt on Invit, going forward debt will be used to fund further asset purchases. Trust will be able to fund debt at competitive pricing because of AAA status of powergrid
- The current plan of powergrid is to monetize TBCB assets through Invit structure
Disclosure: Invested (position size here)