Shapoorji Pallonji Group’s solar EPC arm Sterling & Wilson trims IPO size
Photo Credit: VCCircle

Sterling & Wilson Solar Ltd has trimmed the size of its initial public offering and moderated its valuation expectations by nearly a third, as it prepares to become the first Indian solar engineering and construction company to go public.

The Shapoorji Pallonji Group company has fixed the price for its IPO at Rs 775-780 per share, it said on Thursday. The IPO will begin on August 6 and close two days later. The anchor book will open on August 5.

The company is seeking a valuation of Rs 12,508 crore ($1.81 billion at current exchange rates) at the upper end of the price band. That’s lower than the estimated Rs 18,010 crore at the time of filing its draft prospectus in April this year.

The IPO comprises a complete secondary market sale of 40.06 million shares by chief executive Khurshed Yazdi Daruvala and promoter entity Shapoorji Pallonji and Co. Pvt. Ltd. The IPO size is now pegged at Rs 3,125 crore, down from the planned Rs 4,500 crore when it filed its proposal. After the IPO, the stake of the company’s promoter group will decline to an estimated 75% from 100%.

Before Sterling & Wilson, ACME Group had filed a draft proposal to float an IPO for its solar power arm in September 2017 and was eyeing to be the first solar energy firm to go public. The company may file its IPO documents again owing to a change in valuations.

Two other renewable energy companies had also planned to go public but later shelved their plans. India’s largest green energy firm by capacity, ReNew Power Ltd, had filed its documents last May for a Rs 7,000-7,500 crore IPO. In February last year, Singapore infrastructure conglomerate Sembcorp Industries Ltd also filed for an IPO to list its India energy unit. Sembcorp dropped the IPO plan in June.

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 of power generation capacity by the end of 2022.

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

The IPO of Sterling & Wilson is being managed by ICICI Securities, Axis Capital, Credit Suisse, Deutsche Equities India, IIFL Holdings, SBI Capital Markets, IndusInd Bank and Yes Securities.

The Mumbai-based company offers engineering, procurement and construction services. It ranked as the world’s largest solar EPC solutions provider last calendar based on annual installation of utility-scale photovoltaic systems of more than five mega-watt peak.

The company also undertakes operations and maintenance services, even for projects constructed by other companies. It is present in 26 countries and has commissioned and contracted 205 solar projects with total capacity of 6,870.12 MWp as on March 2019.

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