Sterlite Power Transmission Limited – About the Company
Founded by billionaire Anil Agarwal, Sterlite Power Transmission Limited is one of the leading power transmission infrastructure developers and solutions suppliers in India and Brazil. Sterlite Power Transmission is one of the leading players in the private sector in terms of project portfolio under the regional TBCB route with a market share of 26% of transmission projects that are mostly granted through the same route.
The company has developed integrated power transmission infrastructure and solutions that are operated through two units. It’s Global Infrastructure and Solutions are mainly focused on the Global market, with operations in the Indian and Brazilian Markets.
In 2006, Sterlite Power Transmission Limited has begun the operations as the transmission grid business as a division of Sterlite Technologies Limited. In 2016, its business division was demerged and became a separate Company.
According to the data from the Brazilian Electricity Regulatory Authority ("ANEEL"), it holds 13% market share of the transmission projects auctioned by ANEEL during, Jan-2017 to June-2021. In 2017, the company expanded its operations in the international market by starting its operations in Brazil.
The solutions business unit of Sterlite Power Transmission consists of the products sub-unit, which manufactures and supplies a wide range of products including optical ground wire ("OPGW"), high-performance power conductors and extra-high voltage ("EHV") cables Master System Integration ("MSI") sub-unit that offers customized solutions for the upgrade, uprate and fiberization of existing transmission infrastructure projects.
Additionally, Sterlite Power Transmission operates the Convergence business unit that controls existing power utility infrastructure for telecommunications purposes through building optical fibre infrastructure on top of existing utilities networks.
Sterlite Power Transmission Limited IPO Objectives
The main purpose of the company to raise the fund through IPO is repayment or pre-payment, in full or part, of certain funds borrowed by the Company and KTL. Apart from this, the company will utilize part of the fund for general corporate purposes.
The offer for sale consists of a fresh issue, of aggregates up to RS 1250 crore. Out of this total amount raised from the fresh issue, Rs 955 crore will be used for Repayment or pre-payment, partially or fully of the several debts borrowed by the Company and KTL. And the balance amount will be used for the expenses of the general corporate purpose.
Sterlite Power Transmission Limited IPO Details:
|IPO Open Date||Not Available|
|IPO Close Date||Not Available|
|Listing Date||Not Available|
|Face Value||₹2 per share|
|Lot Size||Not Available|
|Issue Size||[●] shares (aggregating up to ₹1250 Cr)|
|Pre-IPO Placement||[●] shares (aggregating up to ₹220 Cr)|
|Fresh Issue||[●] shares (aggregating up to ₹1250 Cr)|
|Offer for Sale||Not Applicable|
|Issue Type||Book Built Issue IPO|
|Listing At||BSE, NSE|
|QIB Shares Offered||Not more than 75% of the Offer|
|NII (HNI) Shares Offered||Not less than 15% of the Offer|
|Retail Shares Offered||Not less than 10% of the Offer|
|Company Promoters||Twin Star Overseas Limited and Anil Agarwal|
Sterlite Power Transmission Limited IPO Issue Price & Size
The issue price of the Sterlite Power Transmission Limited IPO is in the range of Rs XXXX to Rs XXXX. The size of Sterlite Power Transmission Limited IPO is Rs1250 Cr. And the price of the IPO will be disclosed with the lower and higher price band.
Sterlite Power Transmission Limited IPO Launch Date
The launch date of Sterlite Power Transmission Limited IPO is not yet declared. However, once the IPO will be launched the opening and closing date of the IPO will be known. And apart from the launch date, the portion of equity shares for each category, allotment date, application refund and listing of all the details will be also announced by the company.
Sterlite Power Transmission Limited Financial Statements:
|Particulars (Rs in Cr.)||FY21||FY20||FY19||CAGR|
|Revenue from Operations||2092.39||3004.32||3555.01||-16.20%|
|Cost Of Operations||1438.44||1980.28||2424.97|
|Share of profit of associates and joint venture||0.58||0.87||32.60|
Sterlite Power Transmission Limited Financial Performance
The part of revenue of Sterlite Power Transmission comes from the sale of conductors and power cables. This division contributes, 58.34%, while engineering, procurement & construction (EPC) contracts and power transmission services contribute 18.68% and 9.92% respectively. However, the construction of concession assets and concession assets also contributes 5.59% and 3.09% respectively. And remaining portion of revenue comes from the sale of traded goods, project consultancy services and network infrastructure etc.
In FY19, Sterlite Power Transmission Limited reported Rs3555.01 crore revenue from operations that declined to Rs2092.39 in FY21. In the last two years, the company has registered a negative CAGR of 16.2%.
While on the other hand, the EBITDA of the companyreachedRs1697.72 in FY21 from Rs459.63 in FY19 registering a CAGR of 54.6%. EBITDA contains Rs1724.57, as other income that has been raised through net gain on the sale of power transmission assets.
And because of this other income, the net profit of the company rose to Rs870.12 from the loss of Rs524.80crore. The bottom-line margin of the company in FY21 was 41.59% from negative 14.76%.
Sterlite Power Transmission Limited IPO Promoters & Shareholding of the Company
Promoter and Promoter Group holds around 74.43% equity shares in Sterlite Power Transmission Limited while the remaining 25.57% is held by the public. Pravin Agarwal is the Chairman and Non-Executive Director of the company, whereas Pratik Pravin Agarwal and Anuraag Srivastava are the Managing Directors and CFO of the company.
Why Invest in Sterlite Power Transmission Limited IPO?
If you are looking to invest in the Sterlite Power Transmission Limited IPO, you should consider various aspects to know whether the company has the potential to grow in the near future or not. And to find out that we have analyzed the strength and risks associated with the company. You can check below the same.
Also Read: Golden Rules of investing in Stock Market
- Sterlite Power Transmission Limited IPO is one of the leading players in India's power transmission business, achieved by well-established procedures and advanced technology to recognize and execute projects having high margins.
- Apart from cracking high-margin projects, Sterlite Power Transmission Limited has a track record of executing highly complex projects efficiently and effectively using new technology and innovative solutions.
- It is an integrated player with the potential for tremendous development for its solutions and convergence business segments to deliver the solutions through the full transmission infrastructure value chain in the business.
- Sterlite Power Transmissions Limited is a leading private player in terms of the portfolio of projects it has under the inter-state TBCB route. It is enjoying the market share of around 26% of transmission projects that are awarded through the TBCB route. And this is the second company after the PSU Power Grid Corporation of India Limited (“PGCIL”) enjoying this route.
- Sterlite Power Transmissions Limited is well-situated to get the advantage of increasing deployment of the renewable energy across the globe.
- Envisaging a cleaner India, the demand for a robust transmission grid to connect the centers of renewable energy generation increasing. This is mainly concentrated in the west and south, with demand centres in the North.
- Owing to being backed by well-known business group Sterlite Power Transmissions enjoy the privilege of access to multiple funding sources with high ROCE and an efficient capital structure.
- Driven by the highly experienced board, management and technical team, it is operating with a strong focus on ESG.
- Though, Sterlite Power Transmission is specialized in executing power transmission projects, any kind of failure to recognize and correct the defects or irregularities in holding the title of the property it holds or looking to buy for its purposes.
- This is another one of the highest risks, all types of companies have while operating in the market. Yes, Sterlite Power Transmission also operates in a highly competitive market, and such risk can also affect the ability to acquire projects and execution strategy.
- Another risk in operating in such kind of business is third-party contractors is a performance risk and operational risk with the projects operated through third-party contractors and personnel.
- The power projects are awarded by the Government and any kind of delay in acquiring the projects due to legal issues, or getting the permission and permits to execute and run the project can affect the performance of the company.
- Moreover, any kind of change in the technology or introduction of new technology that requires sizeable capital can also affect the performance of the company.
- The company has a substantial amount of outstanding borrowings that require a significant amount of cash flows to serve and limit the ability of the company to operate freely.
- Finally, at the financial end, in the last three years, the company has shown a negative CAGR growth in revenue as well as operating profits. Even in FY19 company incurred a loss that was not visible in FY20 & FY21 due to extra earnings from other income that came due to selling the power transmission assets.
- The operating and net profit margins of the company are also not doing well, hence becoming a profitable company with steady growth in revenue and operating profits is another significant challenge for the company for the future.
Sterlite Power Transmission Limited IPO Grey Market Premium
Sterlite Power Transmission Limited IPO GMP will be known only when the price of the issue is declared by the company. Once the IPO opens with all the details like IPO price, date, issue size and closing date the demand and supply of the shares in the grey market determines the GMP of the IPO. And till the listing of the stock the GMP might go up or down.
Sterlite Power Transmission Limited IPO Review & Analysis
Sterlite Power Transmission Limited is enjoying the largest private leadership with the project portfolio awarded under the inter-state TBCB route. It has a market share of 26% in transmission projects granted through the TBCB route.
Apart from this, the company also have the competitive advantage of timely and successfully executing projects at different locations. Additionally, it also has the advantage of the capability to undertake the project design using innovative technologies like aerial viewmapping or fields and robotics technology to complete the project more efficiently.
However, despite all these advantages and strengths company have risks in operating this highly vulnerable business. As the company’s major revenue comes from the power transmission solutions business and any kind of changes from the customer's demand can adversely affect the business of the company resulting in affecting the revenue as well.
And if you are looking to invest in the Sterlite Power Transmission Limited IPO, you should wait till the actual issue price is disclosed. Without knowing the share price of the company, it is neither possible to calculate the share price valuation, nor you can compare the same with the peer group members of the company to decide whether to buy or not the shares.
How to Apply for Sterlite Power Transmission Limited IPO?
Applying in the Sterlite Power Transmission Limited IPO is similarly easy and hassle-free just like other IPOs if you have a demat account with Moneysukh. If you don’t you can open the demat account with Moneysukh and follow the instructions given below.
Steps to Apply for Sterlite Power Transmission Limited IPO:
Step 1: When Sterlite Power Transmission Limited IPO opens you can apply online.
Step 2: And for that visit trade.moneysukh.com and log in with your User ID & password.
Step 3: Here navigate to the IPO section and click on Sterlite Power Transmission Limited IPO.
Step 4: Now fill in all the essential information like price, quantity, and so on.
Note: While applying in any IPO, always bid at cutoff price before submitting your application.
Step 5: Finally make the payment and your IPO application is successful.
How to Check Sterlite Power Transmission Limited IPO Allotment Status?
Checking the allotment of shares in Sterlite Power Transmission Limited IPO is also easier with Moneysukh. But you have to wait till the closing of the IPO because only after the closing of the IPO, the allotment is decided as per the subscription.
If the IPO is oversubscribed, there is less chance of getting the allotment in the IPO, and if you have been not allotted any share, you will get your money refunded into your linked bank account. While if you got the allotment of any share, it will be transferred into your demat account, which you can sell on the day of listing or hold for long-term investment.