India: Shapoorji Pallonji arm Sterling and Wilson Solar files for $646m IPO

Photo by Zbynek Burival on Unsplash

Shapoorji Pallonji Group’s solar engineering, procurement, and construction (EPC) business, Sterling and Wilson Solar Ltd, on Tuesday filed the draft prospectus for its initial public offering (IPO), which will see promoters sell shares worth around 4,500 crore ($646.5 million).

The IPO is a pure offer for sale by company’s chairman Khurshed Yazdi Daruvala and Shapoorji Pallonji and Company Pvt Ltd. Daruvala holds 33.33%, while Shapoorji Pallonji and Company holds 65.77% stake. The remaining stake is held by individual members of the promoter group such as Cyrus Mistry.

Mint reported on 18 March that the Shapoorji group was gearing up to file for an IPO of the solar business in order to deleverage its balance sheet by selling shares of the solar EPC business to the public.

Shapoorji Pallonji Group expects to raise around $1 billion by bringing outside investors into its solar unit as part of the group’s efforts to reduce debt, Bloomberg reported in November, citing Jai Mavani, executive director of Sterling and Wilson. A separate listing of Eureka Forbes Ltd, the water purification unit of publicly traded Forbes and Co, and sales of commercial real estate would also be considered, the report said, citing Mavani.

Sterling and Wilson Solar is a global pure-play, end-to-end solar EPC solutions provider and is among the largest solar EPC companies globally. It commenced operations in 2011 as the Solar EPC division of Sterling and Wilson Pvt Ltd, but was demerged into a separate company in April 2017.

The company provides EPC services primarily for utility-scale solar power projects with a focus on project design and engineering and manages all aspects of project execution from conceptualising to commissioning. It also provides operations and maintenance services, including for projects constructed by third parties.

As on 31 December, the company had 183 commissioned and contracted solar power projects with an aggregate capacity of 6,062.83 MW. Last year, Sterling and Wilson won a contract to build a 1,177 MW solar project in Abu Dhabi, the largest at a single location.

Its order book stood at 4,309 crore as on 31 December.

The company reported a revenue of 6,871.70 crore in 2017-18, a significant rise from 3,232.48 crore in the previous financial year. In 2017-18, it reported a profit of 450.53 crore, against173.36 crore in the previous year.

For the nine-month period ended 31 December, it reported a profit of 343.43 crore on a revenue of 5,915.14 crore.

Sterling and Wilson operates in more than 25 countries, with a strong presence in West Asia, Africa, Europe, the Americas and Australia. Its overseas operations accounted for 65.13% of the company’s total revenue.

Investment banks ICICI Securities Ltd, Axis Capital Ltd, Credit Suisse Securities (India) Pvt Ltd, Deutsche Equities India Pvt. Ltd, IIFL Holdings Ltd, SBI Capital Markets Ltd are managing the company’s IPO. So far this year, four companies have raised2,352.19 crore through IPOs, while in 2018, 24 companies raised 30,959 crore.

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India: Shapoorji Pallonji set to kickstart process for listing solar EPC biz

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