India's power InvIT (IndiGrid): 27% of the 9.4% headline is your own principal — read it at the 6.83% income yield
Composite-board score: 6.5 · Where it is strong: Net cash flow, Tax friendliness · methodology
IndiGrid (transmission plus solar) is this site's main exhibit for composition discipline: distributions of Rs16.12 per unit over four quarters, a headline yield of 9.40% — of which Rs4.41 (27%) is return of capital (SPV debt repayment), present in every single quarter (in the June 2025 quarter, Rs2.14 of the Rs4.00 total). The pure income yield is about 6.83%, and after non-resident withholding on the interest component the income in hand is about 6.4–6.5% — a figure that is itself respectable, essentially level with NHIT's 6.4%. The problems are two trends. First, NAV is falling (about Rs148.4 to Rs138.5 year on year, attributed by management to risk-free-rate and tax-assumption revisions) — distributions containing principal while NAV declines means total return is being eaten from both ends. Second, Q2 FY27 paid distributions of Rs392 crore against NDCF of Rs380 crore — about Rs12 crore topped up from reserves; excusable once, a red flag if repeated. DPU growth (FY23 Rs13.35 to FY26 Rs16.00) is bought with continuous acquisitions, not earned organically. Verdict: do, on conditions — price and track it strictly on the income basis (6.83%), with the 9.4% headline allowed only in the company of '27% ROC'; the verification points are NAV stabilising and no further reserve top-ups. Fail both, and it slides into NHIT's contrast group.
In short: four lines first
Listed units, from about Rs171 per unit (demat account)
9.4%（IndiGrid distribution yield and return-of-capital share (filing basis)）
Very hands-off (listed route; quarterly unpacking required)
The falling-NAV channel: assumption revisions (risk-free rate, taxes) have already taken about 7% off NAV — if the rate environment stays hostile, the distribution yield will passively 'improve' (a smaller denominator), which is an illusion, not an improvement. Price on the NAV trend, never on the headline yield.
The numbers that matter
Why we think it makes money
The assets themselves are hard: transmission lines are the power grid's toll booths and the solar fleet is contracted cash flow — the income yield of 6.83% has real assets behind it. This entry's problem is distribution policy and valuation, not asset fabrication, which is why it earns 'conditional' rather than 'below bar'.
Against NHIT (entry No. 67) it forms India's contrast axis: the same country, instrument and tax code — one all-interest with NAV rising, one principal-laced with NAV falling. This site places them side by side to hand readers a ready-made pair of composition glasses.
Transmission revenue is availability-based (it does not swing with power volumes) — among the steadiest cash-flow forms in Indian infrastructure. The asset base deserves a cleaner distribution policy.
How to actually get in
- Listed route: buy IndiGrid units through a demat account (about Rs171 per unit); the foreign-person channel matches NHIT (FEMA non-debt-instrument rules). Track three lines quarterly: distribution composition, NDCF coverage of distributions, and NAV.
What it costs, what it earns
Entry amount: Listed units, from about Rs171 per unit (demat account)
How much work for you: Very hands-off (listed route; quarterly unpacking required)
- Rupee exposure; price behaviour around a falling NAV (the discount can widen in a declining-NAV phase).
- The tracking cost is real: this holding's discipline is a quarterly unpack (composition, coverage, NAV). Readers who find that tedious should hold NHIT.
Basis: this site uses full-cost net returns only — income minus vacancy, management, maintenance, taxes and insurance, then financing interest, with entry costs in the denominator. See the methodology。
Identity & tax
Status (residency / citizenship)
This asset does not count toward the channel No status channel
Threshold: —
买 InvIT 单位是组合投资（FPI 通道），不产生任何印度居留或签证资格；印度没有面向被动房地产投资者的投资移民通道。直接持有印度仓储资产对外资个人亦不现实（机构级门票与外资规则）。
Source: 印度证券交易委员会（SEBI）InvIT 规则；FPI 框架
Tax (investor level)
InvIT 分派按构成部分分别计税：利息、股息、租金与资本返还的税性各不相同——这正是不能只看现金分派率的税务面理由。
- 分派构成逐年由信托披露：利息部分、股息部分、租金部分与资本返还（摊还出资）的预提与税率各不相同，非居民按各部分适用口径预提。
- 资本返还部分不是收益，是本金的退回——把它计入「收益率」会在税务与经济两个层面同时算错。
- 单位买卖的资本利得按印度规则纳税（持有期与居民身份决定口径）。
Double-tax treaties: 印度与新加坡有全面税收协定；InvIT 分派各构成部分的协定待遇逐项适用，以信托年度税务文件为准。
Source: NDR InvIT 年度分派税务文件；印度所得税法 InvIT 条款
This section is general information only — not immigration or tax advice. Program rules change frequently; before acting, rely on the official texts and a licensed adviser.
Risks: what could go wrong
What we have not verified yet
The following key figures have not yet been verified; the reason is noted for each item.
- The 6.4–6.5% income-in-hand range is this site's derivation (income components estimated at the 5% tier): non-resident treatment of the capital-repayment component follows a "specified sum" formula case by case, per the custodian's withholding.
- Quarterly NAV bases (fair value vs filed NAV) follow the company's own filings; this page's trend figures are a research-date compilation.
FAQ
- Is return of capital inherently bad?
- No: infrastructure debt amortisation naturally generates cash reflux, and distributing it is a normal part of the InvIT structure (US MLPs and some REITs work the same way). The question is never 'is there ROC?' but 'is it printed, and which way is NAV going?': ROC with NAV rising is healthy amortisation; ROC with NAV falling plus reserve top-ups is three bad things in one frame. IndiGrid is currently the latter, hence the conditions in plain sight.
- Why not simply buy NHIT and save the trouble?
- If you want one Indian InvIT exposure, NHIT is indeed less trouble (pure composition, rising NAV). IndiGrid's differentiation is the asset: availability-based transmission income is more cycle-resistant than tolls, and its income yield matches NHIT's — it suits holders willing to pay the quarterly-unpack tracking cost. The rating gap between the two entries (do vs conditional) is precisely the price of that cost.
- DPU rises every year — why call the growth acquisition-bought?
- Read DPU growth alongside unit count and asset scale: assets arrive by acquisition and units by issuance, and per-unit distributions climb behind them — that is balance-sheet growth, whose quality depends on each acquisition's yield covering its cost of capital. Organic growth (same-asset revenue growth) in transmission is inherently low-single-digit. The two growth species need different reading: acquisition-led growth demands acquisition-pricing checks; organic growth demands operating metrics.
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