Shares of PowerGrid Infrastructure Investment Trust (InvIT) listed 4 per cent premium on Friday after its initial public offering was subscribed 4.83 times last week. PowerGrid Infra shares were trading 3.8 per cent lower from their issue price, at Rs 103.82 on BSE, while the benchmark 30-share Sensex gained 0.04 per cent to 48,713.50 points.
As per management projections, Powergrid InvIT is likely to generate cash flow from operations at an average of Rs 1,170 crore over the next three years, which implies a 10 per cent cash flow yield.
Many brokerage firms have recommended subscribe rating to the IPO given the 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 Rs 100 price band for the issue, the issue drew bids worth roughly Rs 20,547 crore.

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An infrastructure investment trust is a quasi-debt instrument that provides investors with a steady yield derived from cash flows 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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PowerGrid Infrastructure Investment Trust (InvIT)-View Detailed Analysis