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Power grid infrastructure investment trust

Power grid infrastructure investment trust

  • The Power Grid Corporation of India has recently started an ‘Infrastructure Investment Trust’ called a Power Grid Infrastructure Investment Trust (PGInvIT).
  • This will be the first time that a public limited company has resorted to ‘Infrastructure Investment Trust’ to monetize its assets.

Keypoints:

  • However, earlier, the country’s first Infrastructure Investment Trust ‘IRBInvIT’ and the second ‘India Grid Trust’ have been made public in the year
  • This will be the third Infrastructure Investment Trust ‘to be listed in Indian markets after them.
  • Be aware that through InvIT, a state-run company can meet funding requirements for itself without government support.

Power Grid Corporation of India:

  • Power Grid Corporation of India Limited is a public sector undertaking of India. It is the largest electricity transmission company in the country. It was started in 1992-93, currently it is a Maharatna company. It is operated through the Ministry of Power.

Infrastructure Investment Trust:

  • InvITs is a collective investment scheme just like a mutual fund.
  • InvITs are designed to receive small amounts of funds from many investors for direct investment in infrastructure projects.
  • InvITs can be seen as a modified version of the ‘Real Estate Investment Trust’, designed to generate income and operational basic infrastructure such as roads, power transmission lines and gas pipelines etc.
  • It is a type of IPO.The minimum investment limit in an ‘InvIT Initial Public Offer’ (IPO) is one million rupees.
  • As a result, InvITs are suitable for institutional and non-institutional investors with good net worth.
  • Infrastructure investment trusts are also listed on the stock exchanges through an IPO.
  • Currently only 2InvITs are listed on the stock exchange, the first being IRBInvIT and the second India Grid Trust.
  • It is regulated through SEBI (Infrastructure Investment Trusts) Regulation,

Source: The Hindu

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