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The PGInvit (Power Grid Infra Investment Trust) is a financial vehicle used for investing in infrastructure projects, particularly in the power transmission sector in India. It allows investors to pool their money to fund infrastructure projects and receive dividends from the income generated by these projects. Here are some key points about PGInvit:
1. Share Price and Dividends: PGInvit was launched in May 2021 at 103 rupees per unit, and its current market price (CMP) is around 104 rupees. In the past two years, the stock price hasn't seen significant growth, but it has paid dividends totaling Rs 25.5 per unit, which is approximately 25% of the initial value.
2. XIRR: If an investor bought 100 units during the listing at a cost of 10,000 rupees and received approximately 2,295 rupees after-tax dividends, the XIRR (Internal Rate of Return) is approximately 11.5% pre-tax and 10.4% post-tax, which is higher than most bank deposits in India.
3. Nature of Investment: PGInvit offers stable and regular income in the form of dividends, making it more of a passive income stream that pays out every quarter.
4. Sponsor: Power Grid, the sponsor of PGInvit, is the third-largest transmission utility globally and holds over 85% share in India's cumulative inter-regional power transfer capacity.
5. Assets: PGInvit owns and operates inter-State Transmission System (ISTS) projects, including transmission lines and substations.
6. Positive Aspects: PGInvit benefits from long-term contracts, high operational efficiency, good revenue generation, low counterparty risk, continuous dividend payouts, and a AAA CRISIL rating.
7. Risks: Risks include maintaining high line availability, future debt-based acquisitions, delays in collection, changes in interest rates, and regulatory restrictions on sponsor divestment.
8. Market Performance: The stock's performance is influenced by factors like FII and DII selling, promoter holding, FII and MF stake changes, and retail investor participation.
9. Investment Strategy: PGInvit is a mix of debt and equity, offering stable income. It can be attractive for investors seeking stable income and looking to de-risk their equity portfolio.
10. Comparison: It's important to distinguish between equity investments for growth and stable income. PGInvit offers stable income, while other stocks like Power Finance Corporation Limited may provide higher capital appreciation.
11. Recommendation: The author suggests that PGInvit can be an attractive option for those seeking stable income. They have been buying more of it at the current price, anticipating potential capital appreciation.
12. Other Investment Opportunities: REC (Rural Electrification Corporation) is mentioned as another stock with better returns and a discussion about its book value.
In summary, PGInvit is an infrastructure investment trust that provides stable income through dividends from power transmission assets. It's considered a good option for investors seeking stable income and looking to diversify their portfolio. However, potential risks and market conditions should also be considered before making an investment decision.
The content on this KZbin channel is for informational purposes, and while we strive for accuracy, errors may occur. Viewers should verify critical information independently and consult experts when necessary. We are not responsible for errors or actions based on the content, and viewers use it at their own discretion.
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