Power Grid is the first Indian PSU to launch its infrastructure trust or InvIT to raise Rs 7,700 crore. The InvIT is priced at Rs 99-100 a share and the IPO launches for subscription on April 29.

Speaking to CNBC-TV18, K Sreekant, CMD of Power Grid said that part of InvIT IPO proceeds will be re-deployed in future projects of the company.

“For the shareholders of Power Grid, this will be value unlocking because the capital deployed into these operational assets will be available at a premium and will be available for redeployment into the new builds. So, that is the benefit to the existing shareholders,” he said.

He also said that consistent cash flow of assets is the biggest incentive for InvIT investors. “We are going to put assets of 5 operational companies – 11 transmission lines and 3 substations for Rs 7,100 crore of gross block assets into this. These are all operational assets with 2-4 years of commercial operations and have achieved a consistent track record of operational performance by more than 98 percent threshold in the operational. So stable and predictable cash flow is the biggest USP,” he said.

Sreekant further added that there is no need of giving the Right of First Refusal (RoFR) to InvIT on the company’s assets and that the future transactions will be based on arms’ length. He also said that the investors have accepted Power Grid's views on the RoFR aspect.

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(Edited by : Abhishek Jha)