Power Transmission company Sterlite Power (SPTL) is gearing up for an IPO as the company has appointed Axis Capital and JM Financial to manage the issue, according to some media reports. Billionaire Anil Agarwal-led SPTL is planning to raise about Rs 2,500-3,000 crore via its primary offering in the ongoing financial year (FY 2021-22). The reports add that the company is expected to file its DRHP soon.

The IPO will mainly consist of new shares, but existing stakeholders may offload their stake, as well. They may appoint more bankers as the IPO plans progress, the media reports suggested. Sterlite Power manufactures power products, and is in the business of power transmission, and offers solutions for problems of the intersection of time-space and capital.

The company is likely to dilute its stake at a valuation of Rs 20,000 crore, which is a decent headroom for hefty upside for the company. Sterlite has approximately 13,500 circuit km of transmission lines. Sterlite Power is the second most prominent power transmission company of India after PowerGrid NSE and is ahead of Adani Transmission and Essel Group in terms of market share.

Power-Grid has a market cap of Rs 1.2 lakh crore while Adani Transmission's m-cap stands at Rs 1 lakh crore after a 50 percent drop in the stock in the last few weeks. The Institute of Energy Economics and Financial Analysis (IEEFA), in a report released in February 2020, pegged Sterlite Power’s market share at 31.5% in terms of tariff. PowerGrid had a market share of 36%, and Adani Transmission less than 18%. Among the positives for the company, a strong corporate backing, robust order book in India and Brazil, 5G rollout, and power transmission infrastructure are included.

Also, the company has been focusing on debt reduction and toppling growth via monetizing assets through INVIT's and other means. The company turned profitable in the financial year 2020-21 by reporting Rs 362.92 crore profit on a standalone revenue of Rs 2,933.85 crore. Consolidated profits for the year stood at Rs 869.77 crore. The company had announced an interim dividend of Rs 5.30 per share with a face value of Rs 2 apiece for the year. There are a few reports that the company may issue bonuses and split shares soon.