About Powergrid Infrastructure Investment Trust

Powergrid Infrastructure Investment Trust was registered with SEBI on January 7, 2021 as an Infrastructure Investment Trust (InvIT) under the Securities and Exchange Board of India, ) Regulations, 2014 in the Republic of India . The Sponsor, Power Grid Corporation of India Limited (PGCIL) settled the Trust on September 14, 2020 as an irrevocable trust, pursuant to the Trust Deed, under the provisions of Indian Trusts Act, 1882 for an initial sum of Rs. 10,000. Further, Powergrid Unchahar Transmission Limited ( PUTL) has been appointed as the Investment Manager, and Powergrid has been appointed as the Project Manager to the Trust. Power Grid is a CPSE under the Ministry of Power, GoI and is listed on BSE and NSE. The Sponsor, Powergrid Corporation of India Limited (PGCIL) is engaged in project planning, designing, financing, constructing, operating, and maintaining power transmission projects across India and undertakes operations in the Indian telecom infrastructure sector. The Sponsor provides transmission and distribution consultancy services in India and other jurisdictions, with footprints in 21 countries (including India). The Sponsor, through its wholly-owned subsidiaries, is setting up, implementing and operating transmission projects at various locations in India where the right to provide transmission services is procured under the TBCB (Tariff Based Competitive Bidding) mechanism. As of September 30, 2020, eight of these ISTS SPVs had commenced commercial operations, comprising 39 transmission lines (6,398 ckm), with a total power transformation capacity of 9,630 MVA. The remaining Sponsor TBCB Projects are at different stages of development. The Initial Portfolio Assets comprise five power transmission projects located across five states of India. The projects comprise 11 transmission lines, including six 765 kV transmission lines and five 400 kV transmission lines, with a total circuit length of approximately 3,698.59 ckm, and three substations with 6,630 MVA of an aggregate transformation capacity and 1,955.66 km of optical ground wire. The Initial Portfolio Assets were awarded to Sponsor under the TBCB mechanism on a build-own-operate-maintain (BOOM) basis. Investment Manager, Powergrid Unchahar Transmission Limited, a wholly-owned subsidiary of the Sponsor, is responsible for managing the Trust and the Initial Portfolio Assets as well as undertaking investment decisions relating to its assets. The Investment Manager has been engaged in the power transmission business since Fiscal 2014 and has relevant infrastructure sub-sector experience owing to its involvement in the construction and operation of a transmission system. The Investment Manager meets the prerequisite experience as required under the InvIT Regulations. Investment Manager has overall responsibility for setting strategic direction, including in relation to its future acquisitions, divestment, or enhancement of assets. Sponsor has been awarded various transmission projects under the TBCB mechanism adopted by the Central and the State Governments and as of September 30, 2020, had the highest market share, on the basis of number of projects awarded among the ISTS projects awarded under the TBCB mechanism (Source: CEA Monthly Progress Report of Transmission Projects awarded Through Tariff Based Competitive Bidding (TBCB) Route (Completed Projects), September 2020; CEA Monthly Progress Report of Transmission Projects awarded Through Tariff Based Competitive Bidding (TBCB) Route (Under Construction Projects), September 2020). During the period October 6, 2008 and September 30, 2020, Sponsor was declared as the successful bidder for 16 out of 52 ISTS projects awarded under the TBCB mechanism. In addition, Sponsor was awarded four intrastate projects through the TBCB mechanism. As of September 30, 2020, Sponsor operated, on a standalone basis, 1,237 transmission lines aggregating to 161,742 ckm (circuit km), 248 substations (including HVDC substations and GIS substations) with 410,185 MVA of transformation capacity. Further, as of September 30, 2020, Sponsor's total transmission assets, including its wholly owned subsidiaries, consisted of 1,276 transmission lines aggregating to 168,140 ckm, 252 substations with an aggregate transformation capacity of 419,815 MVA. Apart from this, the Sponsor also has a diverse set of equity investors, including foreign portfolio and institutional investors, mutual funds and insurance companies, and access to a wide range of project finance and debt instruments from Indian and international markets and investors.

Powergrid Infrastructure Investment Trust Chairman Speech

Our Valued Unitholders,

At the outset, I extend my best wishes to you and hope you are safe!

It is my first interaction with you and it is my pleasure to present to you, the first annual report of PGInvIT, India's first InvIT by a Government entity.

FY 2021-22 has been an exciting first year for PGInvIT. Starting from executing India's largest InvIT IPO by a Govt. entity, which received overwhelming response from investors to operating assets efficiently and making distributions as committed, we have commenced our journey on the path of providing consistent, stable and visible returns to our unitholders.

Performance Powered by AAA

The completion of first year also reinforces our belief and optimism in our unique value proposition of AAA - Assets, Assurance and Advantage.

The five TBCB Assets housed under five Special Purpose Vehicles that we own are fully operational and revenue generating and have consistently exhibited sound operational track record. The Assurance comes in the form of Fixed tariffs for 35 years period without regulatory risk and the backing of an experienced, world-class Sponsor and Project Manager, POWERGRID. I am sure with their expertise in operating and managing power transmission assets, the InvIT assets will continue to achieve high availability. Besides, Sponsor's large pool of transmission assets and monetisation targets under National Monetisation Pipeline backed by our low leverage provides us a distinct Advantage. In addition, the Availability-based tariffs and incentives provide additional Advantage to PGInvIT ensuring stability.

Delivering on Commitments

PGInvIT aims to deliver returns to its unitholders through operational efficiency and a growth strategy that is value accretive. In this direction, I am happy that in the first year, PGInvIT has been able to achieve both.

Riding on excellent operational performance, despite a challenging environment due to COVID-19 pandemic, the Trust declared three consecutive distributions aggregating '10.5 per unit for the year and made two acquisitions, funded largely through debt raised at very competitive rates.

We are happy to note that the investors' confidence in PGnvIT continues post-IPO also. We look forward to our investors' continued support.

Way Forward

We remain focussed on capitalising on our strengths and on the opportunities emerging from GoI's monetisation thrust and yearly monetisation targets for our Sponsor to create value for our investors and to deliver on our growth strategy.

We envisage acquisition of residual 26% equity stake of our Sponsor in PKATL, after July 2022 in accordance with the transmission service agreements. We are looking forward to Sponsor's monetisation programme for the year 2022-23 while simultaneously scouting for opportunities outside of POWERGRID.

Thanks

We thank GoI for creating an enabling environment for emergence of infrastructure investment trusts as a unique financial instrument, which can provide stable returns to investors over the long term. With their ability to channelise long-term global financial capital, InvITs can support investment cycle in the country. We would also like to thank SEBI and other govt. agencies like the IRDAI, PFRDA for their policy decisions which would go a long way in increasing the liquidity and providing access to long tenure debt. These bode well for the progress of the nation while providing an avenue for all types of investors seeking predictable returns.

Our first Chairman, Smt. Seema Gupta demitted the office on May 31, 2022 upon her superannuation from POWERGRID. We would like to place on record our deep appreciation and gratitude for her invaluable contribution and guidance during both pre and post IPO period of PGInvIT. We would also like to express our gratitude to Mr. M. N. Venkatesan and Mr. Sunil Kumar Sharma, whose tenure as Independent Directors ended during the year. Their experience, knowledge, guidance and support, despite the pandemic, played a key role especially during our initial public offer.

I look forward to working with my colleagues on the Board and the management team at PGInvIT to keep working towards making PGInvIT a rewarding investment for our investors.

Thank you for being a part of PGInvIT story.

Yours Sincerely,

Abhay Choudhary

Chairman

Powergrid Infrastructure Investment Trust Company History

Powergrid Infrastructure Investment Trust was registered with SEBI on January 7, 2021 as an Infrastructure Investment Trust (InvIT) under the Securities and Exchange Board of India, ) Regulations, 2014 in the Republic of India . The Sponsor, Power Grid Corporation of India Limited (PGCIL) settled the Trust on September 14, 2020 as an irrevocable trust, pursuant to the Trust Deed, under the provisions of Indian Trusts Act, 1882 for an initial sum of Rs. 10,000. Further, Powergrid Unchahar Transmission Limited ( PUTL) has been appointed as the Investment Manager, and Powergrid has been appointed as the Project Manager to the Trust. Power Grid is a CPSE under the Ministry of Power, GoI and is listed on BSE and NSE. The Sponsor, Powergrid Corporation of India Limited (PGCIL) is engaged in project planning, designing, financing, constructing, operating, and maintaining power transmission projects across India and undertakes operations in the Indian telecom infrastructure sector. The Sponsor provides transmission and distribution consultancy services in India and other jurisdictions, with footprints in 21 countries (including India). The Sponsor, through its wholly-owned subsidiaries, is setting up, implementing and operating transmission projects at various locations in India where the right to provide transmission services is procured under the TBCB (Tariff Based Competitive Bidding) mechanism. As of September 30, 2020, eight of these ISTS SPVs had commenced commercial operations, comprising 39 transmission lines (6,398 ckm), with a total power transformation capacity of 9,630 MVA. The remaining Sponsor TBCB Projects are at different stages of development. The Initial Portfolio Assets comprise five power transmission projects located across five states of India. The projects comprise 11 transmission lines, including six 765 kV transmission lines and five 400 kV transmission lines, with a total circuit length of approximately 3,698.59 ckm, and three substations with 6,630 MVA of an aggregate transformation capacity and 1,955.66 km of optical ground wire. The Initial Portfolio Assets were awarded to Sponsor under the TBCB mechanism on a build-own-operate-maintain (BOOM) basis. Investment Manager, Powergrid Unchahar Transmission Limited, a wholly-owned subsidiary of the Sponsor, is responsible for managing the Trust and the Initial Portfolio Assets as well as undertaking investment decisions relating to its assets. The Investment Manager has been engaged in the power transmission business since Fiscal 2014 and has relevant infrastructure sub-sector experience owing to its involvement in the construction and operation of a transmission system. The Investment Manager meets the prerequisite experience as required under the InvIT Regulations. Investment Manager has overall responsibility for setting strategic direction, including in relation to its future acquisitions, divestment, or enhancement of assets. Sponsor has been awarded various transmission projects under the TBCB mechanism adopted by the Central and the State Governments and as of September 30, 2020, had the highest market share, on the basis of number of projects awarded among the ISTS projects awarded under the TBCB mechanism (Source: CEA Monthly Progress Report of Transmission Projects awarded Through Tariff Based Competitive Bidding (TBCB) Route (Completed Projects), September 2020; CEA Monthly Progress Report of Transmission Projects awarded Through Tariff Based Competitive Bidding (TBCB) Route (Under Construction Projects), September 2020). During the period October 6, 2008 and September 30, 2020, Sponsor was declared as the successful bidder for 16 out of 52 ISTS projects awarded under the TBCB mechanism. In addition, Sponsor was awarded four intrastate projects through the TBCB mechanism. As of September 30, 2020, Sponsor operated, on a standalone basis, 1,237 transmission lines aggregating to 161,742 ckm (circuit km), 248 substations (including HVDC substations and GIS substations) with 410,185 MVA of transformation capacity. Further, as of September 30, 2020, Sponsor's total transmission assets, including its wholly owned subsidiaries, consisted of 1,276 transmission lines aggregating to 168,140 ckm, 252 substations with an aggregate transformation capacity of 419,815 MVA. Apart from this, the Sponsor also has a diverse set of equity investors, including foreign portfolio and institutional investors, mutual funds and insurance companies, and access to a wide range of project finance and debt instruments from Indian and international markets and investors.

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Powergrid Infrastructure Investment Trust Company Background

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