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  • Writer's pictureJatin Agarwal

Sterlite Power IPO: The Most Awaited IPO for 2022?

Updated: Nov 1, 2022

Sterlite Power, the name itself is enough to let anyone know that it is a player in the power sector which has been on a different rally altogether this year. 'Sterlite' rings a bell and connects it to the Vedanta group and to the billionaire Anil Agarwal.

The company has already filed its DRHP and is looking to raise capital to repay debt of the company and its subsidiary Khargone Transmission Limited. The IPO dates will be announced soon.

Company Overview

The company is based in India and Brazil and is a large player in the power sector transmission industry. Sterlite is the largest private player in terms of project portfolio under the interstate TBCB route with a market share of 26% of transmission projects granted through the route. Sterlite began operations in Brazil in 2017 as part of their international expansion.

Demerger and Delisting Earlier

In 2015, the company decided that Sterlite Technologies will become a pure-play telecom products and solutions company providing broadband solutions for fully converged networks while the power products business and power transmission grid business will be demerged into ‘Sterlite Power Transmission Ltd’, a separate entity.

Share Allotment during Demerger

The equity shares of the telecom business were to be publicly listed, while those of the newly formed power business were unlisted. Investors had the choice to continue to be associated with one or both of the two businesses.

Once the demerger scheme was effective, investors retained their equity share (FV Rs. 2) in the telecom company. Additionally, for every 5 equity share held in Sterlite Technologies, shareholders had an option to receive 1 equity share of Rs. 2 each of Sterlite Power Transmission issued at a premium of Rs. 110.30 or one redeemable preference share (RPS) of Rs. 2 each issued at a premium of Rs. 110.30 each. The shareholders had the option of continuing to be invested in SPTL or redeeming the RPS through liquidity options. The RPS was to be redeemed within 30 days of issue if opted for.


Crisp Insights

1) The business was demerged from the now known Sterlite Technologies.

2) Unlike other demergers, Sterlite Power remained unlisted for a very long period of time.

3) Launching an IPO now seems like a golden opportunity for the company as the value of the business has increased significantly.

4) Sterlite Power shares were trading at Rs.1600-2000 pre announcement of Bonus issue.

5) Recently the company announced a bonus issue in the ratio 1:1 for Sterlite Power.

Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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