Buy India Grid Trust; target of Rs 113: Edelweiss Securities

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Edelweiss Securities' research report on India Grid Trust

Our conviction on India Grid Trust’s (IndiGrid) bright prospects is underpinned by: 1) significant spurt in IRR(270bps) & DPU(3%) led by recent acquisition & framework arrangement of assets; 2) fresh equity issuance & KKR coming on board as additional sponsor instill confidence & enhances visibility on future acquisitions (beyond ROFO); 3) lifting of related-party transaction cloud with KKR now controlling 74% in investment manager arm improves corporate governance (CG); and 4) 600bps spread between 10 year G-secs (6.7%) and IndiGrid ex terminal value (13.1%; AAA rated) is extreme and warrants rerating.

Outlook

Maintain BUY with a revised TP of INR113 (earlier-INR105) led by change in risk free rate and new assets. In our TP we now assign 3% to the growth value.

For all recommendations report, click here

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