Aequitas Research - Power Grid Corporation of India Limited (POWERGRID) POWERGRID InvIT Pre-IPO

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Aequitas Research

Sumeet Singh

EUR 97.16 For Business Accounts Only

POWERGRID InvIT Pre-IPO

POWERGRID Infrastructure Investment Trust (PGIT) aims to raise around US$1bn in its India IPO.

PGIT is an investment trust setup to own transmission assets of its sponsor Power Grid Corporation of India Limited (PGCIL). PGCIL is a central public sector enterprise which has been listed since 2007.

PGIT will initially own five assets with a total network of 11 power transmission lines of approximately 3,698.59 ckm and three substations having 6,630 Megavolt amperes (MVA) of aggregate transformation capacity, as of Sep 2020, across five states in India. The total valuation of the assets was INR105bn (US$1.4bn) as of Sep 2020.

These assets were awarded to PGCIL on a build-own-operate-maintain (BOOM) basis. Therefore, the assets are operated under a long 35 years service agreement with largely pre-fixed revenue based on availability. In that sense, they will provide stable returns.

However, its revenue terms are structured in such a way that its yield will continue to decline, while its sponsor’s government ownership will mean that it's unlikely to diversify away from transmission assets with declining yield.

31/03/2021 10 EN

Underlying

Power Grid Corporation of India Limited

Power Grid Corp. of India is a power transmisson utilities company. Co. is engaged in the planning, coordination, supervision and control over inter-state transmission system and operation of national & regional power grids. Co.'s Power System Management business takes continuous action regarding operation and maintenance to seek to ensure compliance with prescribed standards as well as to achieve high availability of the system. In the telecom business, Co.'s brand name "POWERTEL" is the only utility in India having an overhead optic fiber network using optical ground wire on power transmission lines.

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INE752E01010 National Stock Exchange of India India

Provider

Aequitas Research

Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.

Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.

Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.

Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.

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Analysts

Sumeet Singh

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POWERGRID InvIT Pre-IPO

POWER GRID CORPORATION OF INDIA is slightly downgraded to Slightly Positive due to an increasingly adverse environment

MOSL: POWER GRID (Buy)-Steady growth in underlying Transmission numbers

Monthly LMI Update Independent Investment Research

Onewo Space-Tech Pre-IPO

Legend Biotech Follow-on Offering

Xtep International Placement

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