In April 2019, SEBI came out with revised guidelines for determination of allotment and trading lot size for InvITs and real estate investment trusts (REITs) which specify that the minimum value of a single lot (or minimum subscription requirement) should be brought down from Rs 5 lakh to Rs 1 lakh for InvITs and to Rs 50,000 in case of REITs.
SEBI required stock exchanges (National Stock Exchange and BSE) to implement this reduction in lot size in consultation with the publicly offered InvITs and REITs within six months.
The decision is likely to go a long way in enhancing liquidity for units and attracting wider participation from retail and high net worth investors in addition to institutional investors. The reduction in the minimum lot size for InvITs will now allow investors with lower sums of Rs 1 lakh to 1.5 lakh to invest in InvITs.
It will provide an attractive opportunity for retail investors to earn stable yields with growth by investing in operating infrastructure assets. IndiGrid said the newly traded lot sizes will be effective immediately.
"The decision to reduce the lot size by SEBI is a testimony to the reinforced confidence in InvITs as a credible investment alternative for retail investors," said its Chief Executive Officer Harsh Shah,
In a short span of about two years of coming into existence, institutional investors, as well as retail investors, have shown considerable interest for investing in InvITs to earn stable yields, he said.
"Besides 57 per cent of foreign institutional investor shareholding including KKR and GIC, seven domestic insurance companies and for mutual funds have invested in IndiGrid. The value of retail and HNI investors in IndiGrid has increased by more than 1.5 times since its listing in June 2017."
The trust has signed framework agreement to acquire three power transmission assets worth Rs 6,500 crore across seven states over the next two years in addition to existing assets under management of Rs 10,600 crore.
It owns eight operating projects consisting of 18 transmission lines with more than 4,900 circuit km length and four substations with 7,735 mega volt amp transformation capacity. IndiGrid is managed by Sterlite Investment Managers Ltd which is majority owned by KKR.