In a bid to attract investors seeking higher yields, IndiGrid InvIT has emerged as a promising option with a yield of more than 9%. But is it a smart investment choice? In this article, we'll delve into the world of InvITs, explore what IndiGrid InvIT is, its performance, and whether it's worth investing in.
Infrastructure Investment Trusts (InvITs) are Collective Investment Schemes (CIS) registered with SEBI, similar to mutual funds. They raise funds from investors and invest in infrastructure assets like power transmission lines, solar power generation, and storage projects. The income generated by these assets is distributed to investors in the form of quarterly distributions.
IndiGrid InvIT is India's first and largest publicly listed InvIT, owning and operating power transmission, renewable generation, and energy storage assets across the country. With assets under management (AUM) of over Rs. 32,800 crores, it enjoys a strong AAA credit rating.
Since its listing in June 2017, IndiGrid InvIT has grown its AUM by more than 8 times, with acquisitions being distribution accretive. The Distribution Per Unit (DPU) has risen from Rs. 11 in FY 2018 to Rs. 16 in FY 2026, with the current price per unit trading around Rs. 165, resulting in an absolute gain of 65%.
The management has guided a DPU of Rs. 16 for FY 2025-26, and based on the current unit price, the yield works out to more than 9%. However, there are risks associated with underperformance of infrastructure assets, rising interest rates, potential delays in project completion, and stock market volatility.
Whether you should invest in IndiGrid InvIT units depends on your risk appetite. It's essential to consult a financial advisor who will assess your risk profile and other factors to advise on whether to invest and how much to allocate to it.
