New Delhi: The government asset monetisation programme may take the trust route with central transmission utility Power Grid Corporation of India Ltd (PGCIL) looking to float an infrastructure investment trust (InvIT) – a first by a PSU entity – to unlock value from its operational transmission assets and free up long-term capital for further investments.
Government sources said that the company will shortly appoint a consultant to advice on the modus operandi for floating of the trust and suggest a roadmap for its proposed asset monetisation programme.
“The InvIT route will help the company to get current value of its assets and unlock capital that could be used for further investment and faster development of projects,” said a PGCIL official, who was not willing to be identified.
He, however, said that the PSU was not in a hurry to monetise its assets and would wait for the right market conditions to undertake such exercise. The company also has over Rs 4,000cr of surplus cash and a Rs 10,000cr fund raising programme through bonds that is considered adequate for meeting its entire capital expenditure of about Rs 15,000 crore in FY21 and other greenfield investments.
“Moreover, government may not directly benefit from this asset monetisation, as the money from sale of assets may fall into the books of the PGCIL. However, the
Centre can always recoup some benefits by seeking higher dividend payout from the PSU,” said the source quoted earlier.
The proposed InvIT will be on the lines of a real estate investment trust (REIT) for which the market regulator, the Securities and Exchange Board of India (Sebi), has already finalised detailed norms for trading of trust units.
Already, India Grid Trust (IndiGrid), an infrastructure investment trust (InvIT) sponsored by Sterlite Power Grid Ventures Ltd, is operational.
With a total asset size of over Rs 2 lakh crore and investment of about Rs 1 lakh crore in putting up transmission infrastructure, the proposed monetisation programme of PGCIL could provide it the necessary boost required to push up investments.
