Sterling and Wilson IPO Opens on August 6 : Should You Invest?

It seems the turbulent winds have bypassed the investor’s sentiments. Yes! After the launch of Affle India, IPO, Spandana IPO, now Sterling and Wilson Solar Company is planning to launch its IPO. Here are the details of the upcoming IPO and reason why the investor should indulge in it.    

Business Profile

Sterling and Wilson Solar Limited is a company that offers products and services related to solar engineering, procurement and construction. The company empowers the lifestyle of the people by offering them high end solar power solutions.  The company caters to the domestic as well as foreign markets including South East Asia, Middle East and North Africa, Europe, United States of America and Australia.

Sterling and Wilson IPO Details

Through this IPO the promoters Shapoorji Pallonji and company and Khurshed Yazdi Daruvala plan to divest their stake amounting to Rs 2,083.33 crore and Rs 1,041.67 crore.

As per the media reports, a portion of their net proceeds will be used towards repaying the loans and funding their working capital requirements.

Up to 75% of the offer will be available to qualified institutional buyers and one third will be reserved to anchor investors.

Further, upto 15 percent will be available on a proportionate basis to non-institutional investors and not more than 10% will be available to the retail investors as per the rules initiated by market regulator SEBI.

The key managers to this offer are ICICI Securities, Credit Suisse Securities, Deutsche Equities India, IIFL Securities and SBI Capital Market. IndusInd bank and YES Securities will be the book manager to the issue.

Opening Date of the issue	August 6,2019- August 8,2019
Price Band	Rs 775-780 per share
Minimum Bid	A lot of 19 equity shares and in multiples of 19 shares

Should You Invest?

As per the results published, Sterling and Wilson total revenue from the operations was recorded at Rs 1640.2 crore and Rs 6,871.71 crore and Rs 8,240.41 crore in the financial year 2017, 2018 and 2019 respectively. The combined profit that the company registered was Rs 3,143 crore in 2017 and the consolidated profit after tax was Rs 450.54 crore and Rs 638.23 crore in 2018 and 2019.

Sterling IPO is going to hit the market at a time when the equity markets have declined. If we look closely into the share market,  we see that in July, the benchmark Nifty has stepped down by 5.7%, while the broader market Nifty MidCap 100 and Small Cap 100 has declined to 8.2 and 11 percent.

But the positive part is that despite the weak valuations the sentiment in the secondary is high. There is a healthy demand from institutional investors including foreign portfolio investors for this IPO, so investing in this IPO would be profitable.