Power Grid Infrastructure Investment (PGInvIT) is owned(sponsored) by Power Grid Corporation of India which has been conferred a Maharatna PSU status. The Trust was registered with SEBI on January 7, 2021 as an infrastructure investment trust. Investment Manager of PGInvIT is PowerGrid Unchahar Transmission Limited, a wholly owned subsidiary of PGCIL. PowerGrid InvIT has been formed to own, construct, operate, maintain, and invest in power transmission assets as an infrastructure investment trust.
The trust's initial portfolio assets will have five assets that include, PVTL (PowerGrid Vizag Transmission Ltd), PKATL (PowerGrid Kala Amb Transmission Ltd), PPTL (PowerGrid Parli Transmission Ltd), PWTL (PowerGrid Warora Transmission Ltd) and PJTL (PowerGrid Jabalpur Transmission Ltd). Consistent & stable cashflows, lower operating costs would help to generate higher cashflows to unit holders and market competitive advantage (monopoly) makes this InvIT issue attractive for investors.
Business Overview
The sponsor of PGInvIT is Power Grid Corporation (PGCIL) which is the largest power transmission company in India in terms of length of transmission lines measured in circuit kilometres. PGCIL is engaged in project planning, designing, financing, constructing, operating, and maintaining power transmission projects across India and undertakes operations in the Indian telecom infrastructure sector. Therefore, PGInvIT is likely to receive significant parentage support from PGCIL in terms of both managerial experiences and business strategies. Its initial portfolio assets comprise grid strengthening links, generation linked assets, and assets linked with inter-regional power flow covering states of Himachal Pradesh, Maharashtra, Andhra Pradesh, Madhya Pradesh and Telangana which affirms its significance in power transmission and linkage. Going ahead, the trust is likely to achieve stable distributions for its unitholders by focusing on owning power transmission assets, low operating risks, and consistent and stable cash flows that has been exhibited from the characteristics its Initial Portfolio Assets.
In the wake of long-term growth of the domestic power sector, various policies and investment plans of the Government of India, such as the target for 175 GW cumulative renewable power installed capacity by the year 2022, the Draft National Energy Policy (2017), National Infrastructure Pipeline, proposed amendment to Electricity Act, 2003 and Aatmanirbhar Bharat Scheme, this will provide a very good opportunity for PGInvIT for its growth and business expansion for a long-term purpose.
Financial(As of 30th Sep 2021)-
Parameters | Rs million |
Income(H1FY22) | 5,225.38 |
PAT(H1FY22) | -36.32 |
Asset | 94,187.90 |
Liabilities (at book value) | 3,256.20 |
Net Assets | 90,931.70 |
No. of Units | 910 |
NAV Per Unit (In Rs.) | 99.93 |
Dividend Distribution- Powergrid Infrastructure Investment Trust declared its first dividend of Rs. 4.50 per unit for financial year 2021-22 comprising Rs. 3.02 per unit as interest, Rs 0.96 per unit as taxable dividend and Rs. 0.52 per unit as tax free dividend.
Distribution of income mechanism to Unit holders
Ø Distributed of income will be in form of interest, dividend and capital repayment.
Ø 90% of net distributable cash flow will be distributed to unit holder.
Tax Treatment-
Ø Any dividend or interest income that you get from an InvIT is completely taxable as per income tax slab rate.
Ø Dividend payment by SPVs to InvITs are exempted from TDS.
Ø If unit holder sells InvIT units and earns capital gain, then unit holder has to pay tax on it.