Must know things before applying Sterling & Wilson Solar power IPO – review, allotment, subscription, gmp etc

solar-panels-sterling-wilson-ipo

Sterling & Wilson Solar Power IPO details:

IPO date:                   6 August – 8 August 2019
Issue Size:                3125 Cr
Offer Price:              Rs 775 – Rs 780 Per Equity Share
Market Lot:              19 Shares & multiples
Exchange Listing:   BSE, NSE

IPO Timelines (tentative dates):

Allotment & refund:    16 August
Credit to Demat:           19 August
Listing on Exchange:   20 August

Company Promoters: Shapoorji Pallonji group and Khurshed Yazdi Daruvala

Shapoorji-Pallonji-Group-IPO-sterling-wilson-solar

Objective of the Issue:

Offer For Sale (OFS) by promoter to enhance visibility and brand image.

IPO Registrar: Link Intime India Private Ltd

Company Overview: 

  • Sterling and Wilson Solar Ltd (SWSL – a subsidiary of Sharpoorji Pallonji group) is the largest global solar engineering, procurement and construction (EPC) solutions provider company.
  • Company expanded to 26 countries and became the largest solar EPC solutions provider in each of India, Africa and the Middle East.
  • Current order book stood at Rs 3831 Cr

company website: https://sterlingandwilson.com/

Business Operations:

  • Sterling & Wilson Solar provide EPC services primarily for utility-scale solar power projects with a focus on project design and engineering.
  • The Company also provides operations and maintenance (“O&M”) services.

Sterling & Wilson Solar Power IPO Review:

Financial Performance:

Sterling-wilson-solar-ipo-financials

valuations as on 31st Mar 2019:

1. Earning per share (EPS): 40
2. Price to Earning ratio (P/E): 20
3. Price to Book value: 12

Company category:  fast-grower

Strength:

  • Largest global solar EPC solutions provider in a fast-growing solar industry.
  • Higher number of repeat orders from the existing customers.
  • Reputed promoter (Sharpoorji Pallonji brand).
  • Strong financial performance & order book.

Risks:

  • Slowdown in global economic markets leading to subdued demand of solar services.
  • Client concentration (risk) among top-10 customers.
  • Intensified price competition poses risk to the solar power industry

Peer comparison: 

There is no direct listed peer in India.

Analysis conclusion:

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  • Largest global player, high demand solar industry,  reputed promoter, Strong financial performance are the plus.
  • While current slowdown in global economic markets, client concentration are the risk. Price to Earning (P/E) is around 20 which looks fully priced.
  • Considering all the factors, my personal view is “Positive” for listing gain. But due to current market volatility I recommend you to watch QIB & NII for first 2 days & based on the response take the decision.

BullRun IPO Ratings:  3 stars out of 5 stars

Analysis video link: https://youtu.be/4O0RYHo6Rhk

Sterling & Wilson IPO allotment check:

Sterling & Wilson IPO subscription status:

Sterling-wilson-solar-ipo-subscription-8th-august

Abbreviations:

EPS – Earning per share
OFS – Offer for Sale
P/E – Price to Earning
RoE – Return on Equity
PAT – Profit After Tax
QIB – Qualified Institutional Buyer
NII – Non-Institutional Investors
RII – Retail Individual Investor
CAGR – Compounded Annual Growth Rate
Disclaimer & Conflict of Interest:

The above analysis is based on my understanding of the company and RHP of Sterling & Wilson Solar IPO. You should research more and consult your financial adviser before taking any decision.

Analysis by –  NISM Certified Research Analyst & Investment Advisor.