Brokerage firms back InvIT, IndiGrid due to good recent performances

Venkatesh Ganesh Mumbai | Updated on June 01, 2020

Power sector InvIT, IndiGrid’s recent performance has got a thumbs up from analyst firms.

Equity research and brokerage house firm Edelweiss Securities has given a ‘buy’ rating for IndiGrid. This comes in the wake of a transmission asset acquisition coupled with strong FY20 performance. “We reaffirm confidence in IndiGrid’s business model, which is backed by predictable cash flow, strong growth visibility and attractive 11.4 per cent investment return at the current price,” noted Edelweiss. The brokerage firm has a ‘buy’ rating with a target price of ₹115. IndiGrid shares were trading at ₹100.25, down 1.28 per cent.

IndiGrid has ₹300 crore in cash reserves and since the last 3 years has tripled its Assets Under Management (AUM) from around ₹3,700 crore to ₹12,000 crore. In 2019-20, IndiGrid acquired assets worth ₹6,200 crore which led to a more than two-fold jump in distributable cashflows to ₹720 crore.

On May 30, IndiGrid announced the acquisition of power transmission line operator Jhajjar KT Transco Private Limited for ₹310 crore. Further, the company has set a target of acquiring AUM worth ₹30,000 crore over the next two years.

IndiGrid is also looking to acquire solar projects with operational track record for well capitalized platforms.

Solar project portfolio will remain a minor percentage of our sizable AUM and focused on strong counter parties like SECI or NTPC, Harsh Shah, CEO, IndiGrid had said.

In April, India Ratings, a Fitch Group company, had given a stable rating to IndiGrid’s market-linked debentures.

Published on June 01, 2020

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