Sterlite Power IPO

 

Sterlite Power Transmission Limited, operating in India and Brazil, is a prominent private sector power transmission infrastructure developer and technologies supplier.  Sterlite Power IPO will hit the market in October 2021

About Sterlite Power Transmission

Sterlite Power Transmission is the biggest private participant in terms of project portfolio under the interstate TBCB route, as per CRISIL Research, with a market share of 26% of transmission projects granted via the TBCB route.

They also hold a 13 percent market share of transmission projects auctioned by ANEEL between January 2017 and June 2021, according to statistics from the Brazilian Electricity Regulatory Authority (“ANEEL”).

Sterlite Technologies Limited’s transmission grid business unit started operations in 2006. In 2016, the firm ‘s business division was demerged and handed to them.

They began operations in Brazil in 2017 as part of their international expansion.

Business Model

They have two business units: Global Infrastructure and Technologies, which construct integrated power transmission infrastructure and provide solution products.

Their Worldwide Infrastructure business section is focused on the global market, with present activities in India and Brazil.

The products sub-unit manufactures and supplies a broad variety of product categories, such as high-performance power conductors, optical ground wire (“OPGW”), and extra-high voltage (“EHV”) cables.

They also offer the Master System Integration (“MSI”) sub-unit provides bespoke solutions for the upgrade, uprate, and fiberzation of current transmission infrastructure.

Other Business

They also run the Convergence business unit, which builds optical fibre infrastructure on edge of current utility networks to leverage existing power utility infrastructure for telecommunications.

Despite the fact that the Convergence business unit contributes only a small portion of their overall revenue, they believe it offers them with a future growth opportunity.

Projects

They executed ten power transmission projects in India and one in Brazil, which was also sold. Three projects in Brazil that were in varying phases of development were also sold.

Furthermore, they presently have 11 projects in various phases of development and construction (five in India & six in Brazil). There were 25 projects in all, comprising roughly 13,700 circuit kilometres (“ckm”) of transmission lines, among their ongoing and sold projects.

In India, they have a total of nine finished projects and five continuing projects totaling 9,246 kilometres with a total capital investment of Rs 244,860 million.

Furthermore, their four sold projects and six continuing projects in Brazil total 4,416 ckm and Rs 100,388.06 million in capital investment.

Solutions Business

Their products division, which is part of their Solutions business unit, manufactures and distributes a range of overhead and subterranean goods, such as high-power conductors, extra-high voltage (“EHV”) cables, and optical ground wire (“OPGW”).

They sell their goods all around the world. According to CRISIL Research, in Fiscal Year 2020, they held the second biggest market share (about 21% ) for power conductors.

In addition, its MSI sub-unit provides specialised contracting services, offering unique solutions for brownfield transmission infrastructure improvement and uprate projects.

They also provide EHV complete services, including as cable laying and substation construction.

Sterlite Power IPO

Sterlite Power Transmission Limited, headquartered in Hyderabad has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of INR 12,500.00 million on 16 August 2021.

They may explore a pre-IPO equity share placement for up to Rs 220 crore. If a placement is executed, the quantity of equity shares in the offering will be decreased.

They are now waiting for approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market.

Financials Trends

Particulars	For the year/period ended ( in Cr.)
		31-Mar-21	31-Mar-20	31-Mar-19
Total Assets		6,754.27	9,145.72	12,267.17
Total Revenue		3,816.96	5,158.32	3,571.46
Profit After Tax		870.12	942.97	(524.80)

Basic and Diluted Earnings Per Share

Financial Period	Basic EPS (in INR)	Diluted EPS (in INR)	Weight
Financial Year 2021	142.22	142.22	3
Financial Year 2020	154.13	154.13	2
Financial Year 2019	-85.78	-85.78	1
Weighted Average	108.19	108.19

Objects of the Issue

• Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
• To meet common corporate objectives.

Basis of the offer

The following are some of the basic parameters that are used to calculate the Offer Price:

1. Position of leadership in India’s power transmission business, attained via established procedures and technology for identifying and executing high-margin projects.
2. With the use of technology and new ideas, They have a track record of effectively completing challenging tasks.
3. An integrated player with significant development potential in their Solutions and Convergence areas, delivering solutions throughout the full transmission infrastructure value chain.
4. High return on investment (ROI) and a lean capital structure with numerous funding options.
5. Board, management, and technical staff all have extensive expertise.
6. Organization having a significant focus on environmental, social, and governance (ESG).

Sterlite Power IPO Peer Comparison

S. No.	Face Value	Company Name	PE
1	10	Power Grid Corporation of India Ltd	07.66
2	10	Adani Transmission Limited	157.17
3	2	Techno Electric & Engineering Company Ltd	18.62
4	2	KEI Industries Ltd	23.47
5	2	KEC International Ltd	19.88

Sterlite Power IPO Details

IPO Opening Date	October 2021
IPO Closing Date	October 2021
Issue Type	Book Building
Face Value	2 per  share
IPO Price	0 to 0 per equity share
Market Lot	–
Min Order Quantity	–
Listing At	BSE, NSE
Issue Size	INR 12,500.00 million
Fresh Issue	–
Offer for Sale	–

Sterlite Power IPO Date

Sterlite Power IPO opening date is October 2021, and the closing date is October 2021. The Sterlite Power issue may list in October 2021.

IPO Opening Date	October 2021
IPO Closing Date	October 2021
Basis of Allotment Date	October 2021
Initiation of Refunds	October 2021
Credit of Shares to Demat Account	October 2021
IPO Listing Date	October 2021

Basis of Allotment

Type	% of Offer	Basis of Allotment
Qualified Institutional Buyer	75	Roughly  equivalent
Non Institutional Investor	15	Roughly  equivalent
Retail	10	Minimum level of 1 lot, based on availability, for every shareholder.

Sterlite Power IPO Allotment Status

Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.

Here, you can find the Allotment Status of Sterlite Power IPO.

Sterlite Power IPO GMP

Sterlite Power IPO Grey Market Premium is 0.

Date	GMP (in Rs)	Subject to Sauda	Kostak (in Rs)
October 2021
October 2021
October 2021
October 2021
October 2021
October 2021
October 2021
October 2021
October 2021
October 2021
October 2021
October 2021

Sterlite Power IPO Review

Sterlite Power IPO review will depend on the price band. Whenever it will be announced we will update you regarding review of this IPO is good or bad.

Sterlite Power IPO Risk

• Cost overruns or delays in their under-construction projects are a possibility.
• They might not be able to detect or fix flaws or inconsistencies in the title to the land they possess or want to purchase for their projects.
• They operate in a highly competitive market, and greater competition might have a negative impact on their business.
• The impact of the current coronavirus (COVID-19) epidemic on their financial situation and cash flows is unknown and unpredictable.
• Their industry is governed by sectoral authorities and stringent policy guidelines.
• Technological advancements may render their present technologies outdated or necessitate significant financial investments.

Other Threats

• Sales to a small number of clients account for a substantial part of their product revenue.
• To build and develop their projects, they rely on a variety of third-party contractors, many of whom provide them with specialized and complicated gear.
• Local opponents and other parties may have a negative impact on their business.
• They have a considerable amount of outstanding debt, which necessitates huge cash flows to service and restricts their capacity to operate effectively.
• In regard to the interests of their equity owners and their loans, they are bound by certain arbitration clauses.
• They have unsecured debts that the creditors may call in at any time, which might have an impact on their operation.

Business Approach

They want to be a leader in the power transmission sector when it comes to adopting best practises. They also strive to seamlessly integrate technology and innovation throughout the project lifecycle.

It is giving them a substantial competitive edge and allowing them to accomplish complex and time-sensitive projects.

They use satellite techniques like light detection and radiation (“LIDAR”) and their in-house designed gas insulated substation (“GIS”) oriented technology named Trans-Analyst for extensive route mapping.

This is also used in survey the pre-construction phase of their transmission projects. It enables them to make data-driven decisions and shorten the overall timelines of their project execution.

Awards

They have received many of global and national awards, including:

• Gold Winner at the IPMA Project Excellence Awards for two years in a row (2019 and 2020).
• ‘Utility Deal of the Year’ and ‘Utility M&A Deal of the Year’ at the Asset Triple A Asia Infrastructure Awards 2020.
• The ‘Process Innovation of the Year’ at The Economic Times Innovation Awards 2020.
• The Year in Infrastructure Award (2020) in the utilities and communications category by Bentley Systems Inc.
• Golden Peacock Award for Occupational Health & Safety Award (2020).

Sterlite Power IPO Brokerage views

• Yes Securities : Not Updated
• Choice Brokering: Not Updated
• Axis Securities: Not Updated
• IIFL Securities: Not Updated
• Trade swift: Not Updated
• Anand Rathi : Not Updated
• ICICI Securities: Not Updated

Sterlite Power IPO Subscription Status

Date	Day	QIB	NII	Retail	Employees	Total Subscription
October 2021	1
October 2021	2
October 2021	3

Team

Their senior management team has extensive expertise in building and commissioning, transmission line and substation operation and maintenance, as well as the design and implementation of expansion, operation, and maintenance plans, giving them a major competitive edge.

Many of their senior leadership team personnel have been with them for a long time, and they think that their experience has aided in the growth of their company as well as the establishment of consistent processes and internal controls, all of which are important to their success.

Promoters

• Twin Star Overseas Limited
• Anil Agarwal

Promoters’ Holding

Pre Issue Share Holding	71.38%
Post Issue Share Holding