How is Powergrid script, should I invest

Ans:

Ans: Hello Banibrata,

First of all we need to understand the questions being asked by Hindenberg and try to evaluate whether the allegation made by them makes any sense. If anyone goes through the Hindenberg report than the allegations and questions asked can be bifurcated into below broad categories:

1) Violations of Exchange and listed rules
2) Dubious Intra- Party Transactions
3) Use of Shell companies outside india ( Mauritius) to manuipulate the stock price
4) Money laundering through private Adani companies in listed companies of Adani inorder to look Balance sheet good.
5) Inexperienced Chartered accountants to audit the companies.
6) Using stocks as collateral for debt.

Looking at this points and also the allegations done by Hindenberg, i am fine to believe that there few acts which they taken for granted and manipulate the exchange and listing rules but calling Adani company as CON or Fraud is not what i would call this company. Companies margin are very low as compared to their cost of capital but being an infrastructure led company its takes long gestation period to realise the cash flows. Adani is playing important role in building infrasturcture in India with ports, power, airports etc and even though company is highly levered to build the assets and cash flow, the company has good physical assets in the balance sheet. Even though it may not a investible company for a retail invstor with the sort of volatility and margins they are earning.

Valuations are very much stretch with last 2 years price going to the roof. As a retail investor, one should avoid this company due to many uncertainties going forward.


Disclaimer: This is just for educational purpose and this should not be taken as advise for buy or sell.

Ans: NO

Disclaimer: Investments in securities are subject to market RISKS. Read all the related documents carefully before investing. Please consult your appointed/paid financial adviser before taking any decision. The securities quoted are for illustration only and are not recommendatory. Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Ans: yes it is a solid company and great wealth creator but is slightly expensive now

Ans: » What is PGINVIT?
PGINVIT is an Infrastructure Investment Trust (InvIT) sponsored by Power Grid Corporation of India Limited. It owns power transmission assets like transmission lines and substations.

» How It Works

Investors buy units of the InvIT
The trust earns income from power transmission projects
A major portion of income is distributed to investors regularly

» Main Benefits

Regular cash flow/distribution
Relatively stable business model
Lower volatility compared to many stocks
PSU-backed sponsor adds comfort

» Risks

Limited capital appreciation compared to growth stocks
Interest rate changes can affect prices
Distribution growth may slow in future

» Suitable For

Income-focused investors
Investors looking for portfolio diversification

Not ideal for:

Aggressive wealth creation seekers

» Finally
PGINVIT can be a small part of a diversified portfolio for stable income, but avoid over-allocation. It should complement equity mutual funds and other investments, not replace them.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/