PGCIL’s InvIT: Powergrid Unchahar Transmission Ltd to act as Investment Manager
- April 23, 2021
Powergrid Unchahar Transmission Ltd (PUTL), a wholly-owned subsidiary of Power Grid Corporation of India Ltd, and a project special purpose vehicle will act as the investment manager to PGCIL’s Infrastructure Investment Trust (InvIT) that is set to launch on April 29, 2021.
According to information from official documents, IDBI Trusteeship Services Ltd (ITSL) will act as Trustee to “Powergrid Infrastructure Investment Trust” (PGInvIT), the InvIT of PGCIL.
Here is a broad understanding of how the InvIT will work.
- The initial portfolio assets (IPA) will be five operational project special purpose vehicles, which are currently wholly-owned subsidiaries of PGCIL. The IPAs will be: Powergrid Warora Transmission Ltd; Powergrid Parli Transmission Ltd; Powergrid Jabalpur Transmission Ltd; Powergrid Kala Amb Transmission Ltd; Powergrid Vizag Transmission Ltd
- PGCIL will be the sponsor of PGInvIT and will continue to have a shareholding of at least 15 per cent in PGInvIT. Through the proposed initial public offering (IPO), public unit holders will together hold up to 85 per cent in PGInvIT.
- PGCIL now holds 100 per cent equity in each IPA. The holding of PGCIL in each IPA will be reduced to 26 per cent. This offloading will be done in favour of PGInvIT that will hold 74 per cent in each IPA.
In summary, PGInvIT will hold equity of portfolio assets and the public will hold units of PGInvIT. Thus the public will indirectly hold equity in power transmission assets of PGCIL. This will free PGCIL’s equity holding in its power transmission assets and make available capital that can be recycled for future power transmission projects.
Entities involved
- Trust: Powergrid Infrastructure Investment Trust (PGInvIT)
- Sponsor: Power Grid Corporation of India Ltd
- Investment Manager: Powergrid Unchahar Transmission Ltd
- Trustee: IDBI Trusteeship Services Ltd