Indian grid trust raises $148m from anchor investors

The deal, which marks the country’s second infrastructure trust listing, is the first offering providing access to the Indian power transmission market.

The IPO of India Grid Trust, sponsored by Sterlite Power Grid Ventures, has raised 10.12 billion rupees ($158 million; €142 million) from 19 anchor investors prior to its three-day public offering launched today. 

The shares of over 101 million units were allocated at 100 rupees, which is the upper end of its price range of 98-100 rupees. The listing is part of the Mumbai-based power transmission company’s efforts to raise 22.5 billion rupees and repay debt linked to the trust’s assets. 

The IPO’s two largest anchor investors are Deutsche Global Infrastructure Fund and BNP Paribas Arbitrage, with 17 percent and 21 percent of total anchor allocations respectively. Future Fund Board of Guardians, managed by RREEF America, has also committed nearly 300 million rupees, or 8 percent of anchor allocations. These three investors were also the anchor investors of the market’s first infrastructure trust, issued by IRB Infrastructure Developers early this month. 

Domestic investors include several insurance companies – namely Reliance Nippon Life Insurance, Kotak Mahindra Old Mutual Life Insurance, Reliance General Insurance and Edelweiss Tokio Life Insurance – as well as mutual funds and equity funds. 

India Grid Trust, the second infrastructure trust offering in India, is the first in the power sector to provide access to Indian electricity transmission assets. Infrastructure trusts, or InvITs, are structured to distribute 90 percent of all cash available from income-generating assets to shareholders in a manner similar to REITs.   

The trust now owns and manages two assets, which include eight transmission lines and two sub-stations across four states. The sponsor plans to transfer three inter-state transmission projects to the trust over the next two years while generating capital growth for investors, the company’s chief executive Pratik Agarwal told the local press.