Sterling and Wilson Pvt. Ltd, which houses the group’s solar EPC business, is expected to file the documents with the Securities and Exchange Board of India by early next month, one of the three people cited above said on condition of anonymity.
“The IPO (initial public offering) will be a pure offer for sale of shares worth around ₹4,000 crore by the promoter group, which plans to use the proceeds to pare debt," the person added.
Mint reported in July that the group was considering an IPO of the solar EPC business.
Shapoorji Pallonji Group has hired around six investment banks to manage the share sale, including ICICI Securities Ltd, Credit Suisse and Axis Capital, the second person said, adding that the group expects the solar business to fetch a valuation of as much as $3.5 billion.
The solar engineering business could be an attractive prospect for investors given its global presence, the third person said, also on condition of anonymity.
“The business has global scale and generates close to 80% of its revenue from overseas markets, making it less risky from a geographic and currency risk standpoint," the person added.
Credit Suisse declined to comment on the development. ICICI Securities, Axis Capital and Sterling and Wilson did not respond to emails seeking comment.
Shapoorji Pallonji Group expects to raise about $1 billion by bringing outside investors into its solar unit as part of the group’s efforts to reduce debt, Bloomberg reported in November, citing Jai Mavani, executive director of Sterling and Wilson. A separate listing of Eureka Forbes Ltd, the water purification unit of publicly traded Forbes and Co., and sales of commercial real estate would also be considered, the report said, citing Mavani.
Sterling and Wilson ventured into the solar EPC business in 2010. The company has an installed capacity of more than 1,930 megawatts (MW) and 2,450MW is under construction, according to its website. In addition to India, Sterling and Wilson has implemented solar EPC projects in Egypt, Morocco, South Africa, the Philippines and Namibia.
Last year, Sterling and Wilson won a contract to build a 1,177MW solar project in Abu Dhabi, the largest such project at a single location.
Apart from the solar EPC business, the 90-year-old company also executes EPC services such as MEP (mechanical, electrical and plumbing), co-generation solutions, transmission and distribution, turnkey data centres, diesel generators, as well as operations and management services.
Sterling and Wilson operates in more than 25 countries, with a strong presence in West Asia, Africa, Europe, the Americas and Australia.
The company reported a revenue of ₹6,200 crore in 2016-17, according to its website.