ACME to Reduce its IPO Size from ₹22 billion to ₹10-15 billion

Sterling and Wilson Solar Limited, an engineering, procurement, and construction (EPC) company of Shapoorji Pallonji Group, has filed a draft red herring prospectus as part of its planned initial public offering (IPO). The equity shares offered through the Red Herring Prospectus are proposed to be listed on the Stock Exchanges, and the company has received ‘in-principle’ approvals from the BSE and the NSE for the listing.

The company plans to offer equity shares of face value ₹1 ($0.014) with a total aggregate of ₹45 billion (~$646 million). The offer comprises the sale of equity shares by Shapoorji Pallonji Company Ltd (SPCPL) and Khurshed Yazdi Daruvala, the chairman of the company. SPCPL is selling 65.77% of the equity share capital, whereas Khurshed Yazdi Daruvala is selling 33.33% of his stake. The remaining 0.90% stake will be held by Pallon Shapoorji Mistry and Cyrus Pallonji Mistry.

The prospectus states that the offer proceeds will be received by the promoter selling shareholders, in proportion offered. The promoter selling shareholders will utilize a portion of the net offer proceeds, towards funding partial repayment of loans due to the company and Sterling and Wilson International Solar FZCO from Sterling and Wilson Pvt Ltd (SWPL) and Sterling and Wilson International FZE (a subsidiary of SWPL) respectively.

According to the filings “total income has grown at a CAGR of 58.32% from million (~$394.09 million) in Fiscal 2016 to ₹68,844.20 million (~$987.85 million) in Fiscal 2018, and to ₹60,817.60 million (~$872.67 million) in the nine months ended December 31, 2018 from ₹32,414.50 million (~$465.11 million) in the nine months ended December 31, 2017. Driven by our strong operational capabilities, we have been able to minimize costs and achieve healthy profit margins. Our EBITDA increased from ₹1,958.57 million (~$28.10 million) in Fiscal 2016 to ₹5,504.63 million (~$78.98 million) in Fiscal 2018, and ₹4,768.49 million (~$68.42 million) in the nine months ended December 31, 2018 from ₹2,218.03 million (~$31.82 million) in the nine months ended December 31, 2017. Our profit after tax has grown at a CAGR of 89.57% from a combined profit after tax of ₹1,253.63 million (~$17.98 million) and ₹314.32 million (~$4.51 million) in Fiscals 2016 and 2017, respectively, to a consolidated profit after tax of ₹4,505.35 million (~$64.64 million) in Fiscal 2018, and ₹3,434.30 million (~$49.27 million) in the nine months ended December 31, 2018 from ₹1,733.62 million (~$24.87 million) in the nine months ended December 31, 2017. In Fiscal 2018 and in the nine months ended December 31, 2018, our revenue from operations outside India accounted for 59.11% and 65.13% of our total revenue from operations, respectively.”



Source: Draft Red Herring Prospectus

“As of December 31, 2018, we had 183 commissioned and contracted solar power projects with an aggregate capacity of 6,062.83 MW, that included 165 commissioned projects having an aggregate capacity of 4,596.95 MW and 18 contracted projects having an aggregate capacity of 1,465.88 MW,” the company said in its draft prospectus.

The company’s order book accounted for about ₹43 billion (~$619 million) and received letters of intent of ₹22 billion (~$316) for solar power projects won by the company, which were yet to be executed at the end of last year.

In India, Sterling and Wilson has an EPC portfolio of 3,634.34 MW, consisting of 158 solar power projects, out of which, 152 solar power projects with an aggregate capacity of 3,164.34 MW are commissioned, and six projects with a total capacity of 470 MW are under construction as of December 31, 2018.

Source: Draft Red Herring Prospectus

The company has also commissioned 51 solar rooftop projects with a total capacity of 26.83 MW out of its 152 commissioned projects.

Sterling and Wilson is currently expanding its presence in the Middle East and North Africa region, the rest of Africa, Europe, the United States, and Latin America and Australia according to the prospectus.

ICICI Securities Ltd, Axis Capital Ltd, Credit Suisse Securities (India) Pvt Ltd, Deutsche Equities India Pvt. Ltd, IIFL Holdings Ltd, SBI Capital Markets Ltd were the global coordinators and book running lead managers.

This Month, in Mercom’s newly released India Solar Market Leaderboard 2019 report, Sterling and Wilson emerged as the top EPC company cumulatively in 2018.

Recently, Mercom also reported about another EPC company, Gensol Engineering Limited (Gensol), has filed a draft red herring prospectus for its IPO.