The initial public offering of India Grid Trust, an infrastructure investment trust (InvIT) sponsored by power transmission asset operator Sterlite Power Grid Ventures Ltd, began on a slow note on Wednesday with investors bidding for only 6.6% of the issue size.
The offering of 126.27 million units, excluding the anchor portion, received bids for 8.41 million units, stock-exchange data showed.
The quota of units reserved for institutional buyers was subscribed around 3% while the portion set aside for non-institutional investors, such as corporate houses and rich investors, was subscribed a tad more than 11%. Institutional investors will be allotted not more than 75% of the units.
Retail investors aren’t allowed to bid because InvITs is a new financial concept in India and yet to be tested in the market.
India Grid is the second InvIT to float an IPO; IRB InvIT Fund’s offering earlier this month was covered 8.5 times.
On Tuesday, India Grid raised Rs 1,012.43 crore ($158 million) from anchor investors. The fund allotted 101.24 million units to 16 institutional investors at the upper end of the Rs 98-100 price band.
The trust, which owns inter-state power transmission assets, is seeking to raise Rs 2,250 crore through the public issue that closes on Friday. India Grid was earlier looking to raise Rs 2,650 crore (around $390 million) through the listing.
The proceeds will be used for repaying loans and general corporate purposes. Sterlite Infraventures Ltd is the trust’s investment manager and Axis Trustee Services Ltd is its trustee.
Sterlite Power Grid is a subsidiary of Sterlite Power Transmission, which was de-merged from Sterlite Technologies Ltd with the latter retaining its telecom business in the listed entity. These entities are owned by billionaire Anil Agarwal-led Vedanta Group.
Morgan Stanley India Company Pvt. Ltd, Citigroup Global Markets India Pvt. Ltd and Edelweiss Financial Services Ltd are the lead managers to SPGVL’s InvIT issue.