Sterlite Power Transmission has filed a DRHP with SEBI for an IPO, as reported on 17 August 2021. According to their DRHP, the company will hold an initial sale of shares of up to Rs. 1,250 crores, with a share reservation for its employees. The Anil Agarwal-led Sterlite Power might also indulge in a pre-placement round of Rs. 220 crores which will reduce the issue size of the subsequent IPO.
Now, let’s discuss the particulars of this IPO and the company behind it.
About Sterlite Power Transmission
Sterlite Power is an electricity transmission infrastructure firm with Anil Agarwal and Twin Star Overseas as promoters.
It’s a part of the Vedanta group and has two major operations – Global Infrastructure and Solutions. The former has operations in India and Brazil dealing with designing, constructing, and operating power transmission lines.
The Solutions branch has two sub-segments – products and master system integration. The former sub-segment involves manufacturing and supplying extra-high voltage cables, optical ground wires, and high-performance power conductors. The latter sub-segment involves providing upgrade solutions for existing infrastructure.
The third major operation is the convergence business line, which involves building optical fiber networks over existing infrastructure.
A Brief Overview of the Sterlite IPO
Recently, Sterlite Power Transmission has filed DRHP with SEBI for an IPO consisting of fresh equity shares worth Rs. 1,250 crores. The face value of each share of Sterlite IPO will be Rs. 2 per share. It will be listed on both the NSE and BSE and is expected to open sometime in the last quarter of 2021.
The book running lead managers of Sterlite IPO include Axis Capital, ICICI Securities, and JM Financial, while KFin Technologies Private Ltd. will be the registrar. It will reserve the following portion for different types of investors:
- Qualified institutional buyers (QIBs): 75%
- Non-institutional bidders: 15%
- Retail investors: 10%
The company will use the proceeds of this IPO for repayment or prepayment of borrowings worth Rs. 955 crores availed by it and Khargone Transmission Limited (KTL). The company will use the rest of their funds for general corporate purposes.
Financial Performance of the Company
Sterlite Power manufactures electrical power products and provides infrastructure solutions for power transmission. Its financial success places it in the second rank of top power transmission companies in India after Powergrid and ahead of Adani Transmission and Essel Group. The company’s average industry P/E stands at 45.36x, and its weighted average return on net worth is at 128.59%.
For the year that ended on 31 March 2020, this company generated revenue worth over Rs. 500 crores. However, due to the effects of Covid-19 pandemic, the net worth of this company decreased by 33.53%. Its total assets decreased by 14%, while the net liabilities have increased by 57.09%.
Though the company has incurred losses during the last financial year, it has already started making a comeback with various national energy projects under its belt.
With the consecutive success of recent IPOs, Sterlite Power Transmission IPO can be a great opportunity for investors who have missed any previous ones. The upcoming IPO is scheduled for the last quarter of this year, which gives enough time for investors to prepare.
However, it is crucial for every investor to conduct adequate research before investing in any equity shares.
Frequently Asked Questions
- When is the IPO going to open?
Sterlite IPO’s opening date has not been announced yet. But it’s expected to be sometime in the last quarter of 2021.
- What does Sterlite Power transmission do?
Sterlite Power Transmission sells power utility products and installs electrical lines. It also upgrades and uprates existing power infrastructure.
- What is the minimum investment amount for this IPO?
There is no information available yet about the price band or minimum investment amount for this IPO, as only preliminary papers have been filed.