New Delhi: Setting the ball rolling on the public sector's and its own maiden Infrastructure Investment Trust (InvIT), Maharatna PSU Power Grid Corporation of India Ltd (PGCIL) has filed a draft red herring prospectus (DRHP) to market regulator SEBI and is hoping to launch the InvIT in March this year, sources aware of the matter told PSU Watch. Power Grid plans to use the InvIT to monetise assets worth around Rs 7,000 crore and use the proceeds to pare the debt on its books and fund its capex, said sources.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, had approved the monetisation of assets of Power Grid worth Rs 7,000 crore through InvIT model in September 2020. This is the first time any PSU in the power sector is undertaking asset recycling by monetising its assets through the InvIT model.
The power PSU has already secured approval from the Cabinet for the monetisation of assets worth more than Rs 7,000 crore in the first tranche. However, sources who spoke to PSU Watch on the condition of anonymity said that assets worth Rs 10,000 crore will be monetised. Depending on the response received in the first round, further asset monetisation will be carried out by the Power Grid InvIT in the future.
The Budget 2019-20 had emphasised investment-led growth and indicated that new and innovative financial instruments, including Infrastructure Investment Trusts (lnvITs), have been launched as part of the brown field asset monetisation strategy for augmenting infrastructure investment. Asset recycling is a key strategy of the government to release the capital invested in operational assets and the proposed InvIT of POWERGRID would attract both domestic as well as global investors, including Sovereign Wealth Funds.
Power Grid has assets worth over Rs 2 lakh crore and has made investments of Rs 1 lakh crore in setting up electricity transmission infrastructure. The InvIT will help Power Grid reduce its debt burden and will allow the government to increase its dividend receivables from the PSU.
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