Sterlite Power in Talks with GIC for $300 Mn Funding

Sterlite Power Transmission has been in the news heading with the Government of Singapore Investment Corporation (GIC) for a $300 million fund infusion. This news has created a buzz in the unlisted share market for investors who have invested in Sterlite Power unlisted shares. Whenever any company raises funds or merges with another company, it significantly makes an impact on its unlisted share prices. Since Sterlite Power is a leading global developer of transmission infrastructure, it wants to enhance its business models and value optimization. The company is going through a significant internal structuring exercise with the GIC investment fund, which is turning all eyes toward it. In this blog, we will walk you through the Sterlite Power fund raised by GIC.

An Analysis Of Sterlite Power Transmission

Sterlite Power is a renowned private-sector power transmission infrastructure developer and solution provider company established in 2015. The company operates in India and Brazil and is the most significant player in terms of its project portfolio under the inter-state Tariff based competitive bidding (TBCB) route. The company has a market share of 26% of transmission projects through this route. Presently, the company integrates power transmission infrastructure and solutions via its two business units, including Global Infrastructure and Solutions. The company's worldwide presence and business expansion is the reason people want to buy Sterlite Power pre-IPO shares and become a part of its growth and success.

Synopsis Of The Government of Singapore Investment Corporation (GIC)

Incorporated in 1981, GIC is a global investment fund with $360 billion in assets under management. The company looks after Singapore's foreign investors and is positioned for long-term, flexible investments across asset classes such as fixed income, real estate, private equity, and public equities. When it comes to private equity, GIC invests directly in companies through funds like it invested in Sterlite Power company. GIC is Singapore's biggest reserve management entity, along with the Monetary Authority of Singapore (MAS) and Temasek Holdings.

Sterlite Power Partners With GIC For $300 Mn Fund Infusion

The news about Sterlite Power and GIC has been in the headlines for a $300 mn fund infusion. Sterlite Power, which was established by Anil Agarwal's Vedanta Group, ventured into an internal restructuring exercise to unveil value as part of which allowed the company to carve out its solutions. The company aims to make GIC its strategic partner for the power transmission business. According to the reports, "An internal rejig is underway at Sterlite Power. The plan is to demerge the solutions business and then list it later on the domestic bourses."

Under internal rejigs underway business solution, which was proposed to be demerged, Sterlite Power wants to help power utilities tackle their network congestion challenges by offering bespoke solutions for the upgrade of brownfield transmission infrastructure projects. The company has completed 34,000km + OPGW (optical ground wire) based communication projects under live-line conditions.

In addition, the company is a renowned manufacturer of power cables, conductors, and OPGW, which they supply to all the major states in India, apart from exporting to 60+ countries. The company also has four manufacturing assets in Haridwar, Jharsuguda, and Silvassa.

Role Of GIC In Sterlite Power's Restructure

In the strategic move with GIC, Sterlite Power is demerging its solution business from its entire structure. This division offers strategic enhancements and upgraded solutions to power utilities. The company's plan to demerge the entity entails potential listing on domestic exchanges, an initiative to unlock additional value. Similarly, GIC is marketing a significant entry into Sterlite Power's transmission business, for which the company has already invested $300 million, creating a 51:49 joint venture with Sterlite Power.

Capital Raised By Sterlite Power To Date

In December 2022, Sterlite Power got debt funding of Rs. 305 Cr. from Aseem Infrastructure Finance Ltd, a non-banking finance company (NBFC). The company is promoted by National Investment and Infrastructure Fund (NIIF) for the Kishtwar project. Next, the company raised fresh working capital from IndusInd Bank of Rs. 250 crore. In addition, the company also got Green Debentures worth BRL $400 mn (about Rs. 600 crores) from Sterlite Brazil Participacoes. It is a subsidiary of Sterlite Power in Brazil.

Sterlite Power IPO

Every unlisted company wants to embark on an IPO to increase its reputation, raise funds, expand business operations, and make an impact in the market. Sterlite Power is no exception, the company had filed for IPO with SEBI, but in September 2022, the company withdrew its DRHP (Draft Red Herring Prospectus) and postponed its listing plans due to unfavourable market conditions. However, we believe that the company will surely release its IPO to raise funds in the future. This is an opportunity for retail investors to make early investments in Sterlite Power unlisted shares to secure a high return on their investment.

Glance At The Sterlite Power Unlisted Shares

Presently, Sterlite Power unlisted shares are trading at Rs. 640, which was Rs. 600 per share on August 5, 2023. With about 12 Cr. outstanding shares, the existing valuation of the transmission business and solution business is approximately Rs. 7200 Cr. However, the demerger will significantly influence Sterlite Power valuation in the unlisted share market in the future. It is clear that Sterlite Power unlisted share price might increase in the future based on the market trend and the company's performance.

Future Outlook Of Sterlite Power

India's power transmission sector seems to be promising in the future as the government bids for a project worth Rs. 1.50 lakh Cr. in the next 18 months, which shows that a strong growth phase is on the way for the company. In addition, Sterlite Power and GIC partnership create a dynamic picture of investment and restructuring India's power transmission sector. So, the future of Sterlite Power seems to be positive, so it does make sense to invest in Sterlite Power unlisted shares.

Major Highlights Of The Company

Here are some significant details about the company for you to understand its business and finances in the last year.

• Currently, the company has a total of 17 transmission projects in India in its portfolio, which covers more than 9,529 km, with a total investment of Rs. 25,262 crores.
• It is revealed that the company has developed about 13 transmission projects portfolio in the fast-growing South American nation, covering 4416 km, with a total investment of Rs. 11 983 Cr.
• Due to market volatility, the company has withdrawn its IPO.
• In FY20, the company's revenue was Rs. 3004 crore; in FY21, it was 2092 crore and surged to Rs. 5197 crore in FY22.
• The EBITDA of the company was 80% in FY20, 85% in FY21, and 26% in FY22.
• EPS of the company was 154 in FY20, 142 in FY21, and 71 in FY22.

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Frequently Asked Questions (FAQs)

1. What is Sterlite Power Ltd. unlisted share price today?

And. Sterlite Power Transmission pre-IPO shares are currently trading at Rs. 640. The prices fluctuate based on market trends and the performance of the company.

1. Where do I check Sterlite Power share price?

Ans. You can stay tuned with Stockify to check the updated price of any pre-IPO company shares. We regularly update the prices as per market standards and trends.

1. How do I buy Sterlite Power unlisted shares?

Ans. You can buy Sterlite Power unlisted shares from Stockify. The expert brokers at Stockify will guide you throughout the trading to make it a seamless process.

1. What is the lock-in period of Sterlite Power unlisted shares?

Ans. The lock-in period of unlisted shares is six months from the date of acquisition. Earlier, the lock-in period was one year, but it was reduced to 6 months only to entice investors to buy unlisted shares.

1. What is the minimum ticket size to invest in Sterlite Power unlisted shares?

Ans. The minimum ticket size for Sterlite Power pre-IPO shares is between 30k and 50k. Earlier, the price was higher, about 1 Lac, which was later reduced to 30k.