Vedanta Group unit Sterlite Power Transmission Ltd is waiting for market conditions to turn favourable before it launches a planned initial public offering (IPO) worth ₹1,250 crore.
Pratik Agarwal, managing director, said the timing of the share sale would depend upon market demand and valuation along with other fundraising options available to the company at the time.
“It purely depends on the market; it’s not for us to decide on our own. This is business that needs capital, so whatever is the best solution on the table, we will take that,” Agarwal said in an interview.
Sterlite Power had applied for the IPO in August last year and received market regulator Sebi’s approval in December. However, it has yet to launch the share sale, given the weak market conditions caused by geopolitical tensions and slowdown concerns. The Sebi approval will be valid for 12 months.
Noting that Sterlite Power continues to look at various fundraising options, Agarwal said: “We are constantly looking for capital solutions which address the scale, the size, the valuation, the flexibility; all of those requirements that the capital should come with. And, right now, we have the option of the public markets, if the market supports and the investors are excited. But, of course, there are also private investors and that option also exists. So, we are evaluating everything.”
Mint reported on 21 July that Sterlite Power is in talks with pension funds and sovereign wealth funds to raise $500-1 billion. Agarwal said there are multiple ways to finance the company’s growth including monetizing of assets through infrastructure investment trust (InvIT). In 2020, Sterlite Power sold its 14.7% stake in India Grid Trust (IndiGrid), an InvIT, to institutional and high net worth individual investors, for ₹840 crore. In its draft prospectus, the company said it would use the proceeds of the IPO to either fully or party repay certain loans and for general corporate purposes. “Our company expects that the listing of the equity shares will enhance our visibility and our brand image among our existing and potential customers,” it said.
Apart from India, the company also has operations in Brazil. Recently, it bagged two transmission projects in the South American country.
Sterlite Power has a total of 28 projects covering 13,950 circuit kms of transmission lines in India and Brazil. It also has a portfolio of high-performance power conductors, extra high voltage cables and optical ground wires. The company’s funding needs are expected to grow going forward in line with its diversification plans.
According to the draft prospectus, Sterlite Power’s net profit in FY21 fell 7.7% to ₹870.12 crore.