IPO-bound Sterlite Power Transmission (SPTL) announced a bonus issue in the ratio of 1:1 when it declared its earnings for the financial year 2021-22.

For the fiscal year ended on March 31, 2022, the power transmission player’s net profit halved to Rs 440.14 crore compared to the previous year. It had clocked a net profit of Rs 869.77 crore in FY2020-21.


Group arm’s bottom line was dented as expenses more than doubled in the said period.

However, it clocked a 150 per cent rise in the revenue from operations to Rs 5,197.48 crore in FY22 from Rs 2,092.39 crore in the previous fiscal year.

Following the announcement of results and bonus issue, shares of Sterlite Power Transmission were trading at Rs 1,300 in the unlisted market, as against Rs 900-950 earlier.

However, the stock has fallen from Rs 1,600-1,650 a few months ago as the company was unable to launch its initial public offering, whose nod will expire in December this year.

That said, dealers from the unlisted market are positive on the stock over IPO buzz, strong demand for power, cheap valuations, business expansion and issue of bonus shares.

Divyanshu Aggarwal, Director, Growfast Securities and Credit said the company has shown robust growth in their regular business, including manufacturing and exporting of conductors, optical fibre and creating networks for telecom players.

“The EPC contracting business has gained a lot of strength and attraction and a 150 per cent increase in the top line without the sale of any transmission project is a major achievement,” the Delhi-based dealer said.

Aggarwal believes that Sterlite Power should not be treated as a traditional power transmission company as it is gaining momentum as a service provider for EPC contracts, creating optical fibre networks, convergence business and consulting business.

The company may float its IPO by November this year at a valuation close to Rs 10,000 crore and the price band is likely to be in four digits post bonus, sources told ETMarkets.

Pratik Agarwal, Managing Director, SPTL 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.

The company is likely to hold its annual general meeting (AGM) on September 26 and the record date to determine the eligibility of bonus shares is October 5. The company would file a revised DRHP with Sebi, sources added.

Jasbir Singh, MD & Founders of Pune-based firm Meera Capital and Securities, which deals in unlisted and pre-IPO shares, is positive on the stock and expects encashment of projects from October this year.

“If the company’s projects are complete by the given timeline, we may see a revenue of up to Rs 8,000 crore in next 2-3 years,” he added. “There are strong growth prospects in the coming year to boost its performance.”

However, not everyone is gung ho on the counter.

Dinesh Gupta, co-founder, UnlistedZone, another Delhi-NCR-based pre-IPO consultancy, said that investors should conduct a thorough study despite the rising demand for the power sector.

“The IPO is delayed over the valuation concerns, which are likely to persist in the coming days. The market may not give the expected valuations even this time,” he added.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


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