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Shapoorji Pallonji Group’s solar engineering arm gets SEBI nod for IPO
Photo Credit: VCCircle

Sterling & Wilson Solar Ltd, the solar engineering and construction arm of Shapoorji Pallonji Group, has received regulatory approval to float an initial public offering.

The Securities and Exchange Board of India (SEBI) issued its final observations on Sterling & Wilson’s IPO proposal on July 4, according to information on the capital markets regulator’s website.

Sterling & Wilson had filed the IPO proposal in April.

It is the 16th company to receive regulatory clearance this year to float an IPO. SEBI had approved 72 IPO proposals last year and 46 in 2017.

The proposed IPO comprises a complete secondary sale by existing shareholders worth an estimated Rs 4,500 crore, according to its draft proposal filed with SEBI. The company’s chief executive, Khurshed Yazdi Daruvala, and promoter entity Shapoorji Pallonji and Co. Pvt. Ltd will sell shares in the company.

Sterling & Wilson was the fourth green energy firm to show interest in India’s capital markets.

Previously, ACME Group had filed a draft proposal with SEBI to float an IPO for its solar power arm in September 2017 and was seeking to be the first solar energy firm to go public. The company may refile IPO documents owing to change in its valuations.

India’s largest green energy firm by capacity, ReNew Power Ltd, filed its documents last May for a mega Rs 7,000-7,500 crore IPO but hasn’t made any headway yet.

In February last year, Singaporean infrastructure conglomerate Sembcorp Industries Ltd had filed for an IPO to list its India energy unit. But it dropped the plan last month.

India’s renewable energy sector has recorded heightened deal activity and interest from foreign investors, as the country has set an ambitious target of adding 175 gigawatt (GW) of power generation capacity by the end of 2022.

Some of the world’s biggest pension funds, including Canada Pension Plan Investment Board (CPPIB) and Caisse de dépôt et placement du Québec (CDPQ), are also scouting for deals in India’s solar power sector, VCCircle previously reported.

Sterling & Wilson

The company has hired ICICI Securities, Axis Capital, Credit Suisse, Deutsche Equities India, IIFL Holdings, SBI Capital Markets, IndusInd Bank and Yes Securities to manage the share sale.

Incorporated in March 2017 as Rashmika Energy Pvt Ltd, the Mumbai-based company offers solar engineering, procurement and construction services. It ranked as the world’s largest solar EPC services provider in 2018 based on annual installation of utility-scale photovoltaic systems of more than five megawatt-peak.

The company also offers operations and maintenance services, even for projects constructed by other companies.

It had commenced operations in 2011 as the solar EPC division of Sterling & Wilson before being demerged at the start of 2017-18.

It has presence in 26 countries including India and has 183 commissioned and contracted solar power projects with an aggregate capacity of 6,062.83 MWp as on December 2018.

The company’s order book stood at Rs 4,309.09 crore as on 31 December 2018.

Sterling & Wilson reported consolidated net profit of Rs 343.43 crore for nine months ended December 2018 on revenue from operations of Rs 5,915.14 crore. In the same period for the previous fiscal year, the company’s net profit was Rs 173.36 crore on revenue of Rs 3,232.48 crore.

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