The state-owned electricity transmission operator has applied to SEBI to set up an Infrastructure Investment Trust (InvIT). The move will help the company reduce its debt burden and infuse capital for further expansion, said market experts.
Experts said that the company plans to raise Rs.10,000 crore through the InvIT issues.
The company is engaged mainly in the transmission of power and transmits about 50% of the total power generated in India on its transmission network.
Currently, there are 10 InvIT registered with SEBI - Digital Fibre, India Grid Trust, India Infrastructure Trust, IndInfravit Trust, IRB Infrastructure Developers, IRB InvIT Fund, MEP Infrastructure, Oriental InfraTrust, Indian Highway Concessions Trust, and Tower Infrastructure Trust.
Powergrid will become the second InvIT after India Grid Trust in the power transmission business.
An InvIT is like a mutual fund that pools funds from many institutional investors for investing in infrastructure projects to earn regular returns. InvITs invest in infrastructure building activities such as roads, telecommunication towers or power plants. Typically, institutional investors like mutual funds and HNIs invest in units of InvITs as the minimum ticket size is Rs.10 lakh.