Sterlite Power, ESDS Software get Sebi's nod to float IPOs

Billionaire Anil Agarwal-led Sterlite Power Transmission and cloud services and data centre firm ESDS Software Solution have received capital markets regulator Sebi's go-ahead to raise funds through initial share sales.

The two companies had filed their preliminary IPO (initial public offering) documents with the Securities and Exchange Board of India (Sebi) during August and September.

Sterlite Power Transmission and ESDS Software Solution obtained observation letter from Sebi on December 2 and December 3, respectively, data uploaded on Sebi website showed on Monday.

In Sebi parlance, issuance of observations letter implies its go-ahead for the IPO.

Going by the draft papers, Sterlite Power Transmission is looking to raise Rs 1,250 crore through an initial share-sale.

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The company may consider a pre-IPO placement aggregating up to Rs 220 crore. If such placement is completed, the issue size will be reduced.

Proceeds of the IPO will be used for payment of certain borrowings availed by the company and its arm Khargone Transmission Limited (KTL).

Sterlite Power is promoted by Agarwal and Twin Star Overseas.

The electricity transmission infrastructure firm, part of Vedanta group, has two business lines -- global infrastructure and solutions.

The IPO of ESDS Software Solution consists of fresh issue of shares worth Rs 322 crore and an Offer for Sale (OFS) of up to 2.15 crore equity shares by investor shareholders and a member of the promoter group.

The OFS comprises sale of up to 1.68 crore equity shares by South Asia Growth Fund II LP, up to 42.31 lakh equity shares by GEF ESDS Partners LLC, up to 4 lakh equity shares by Sarla Prakashchandra Somani and up to 34,000 equity shares by South Asia EBT Trust.

The Nashik-based firm may consider a pre-IPO placement aggregating up to Rs 60 crore. If such placement is completed, the fresh issue size will be reduced.

According to merchant banking sources, the initial share-sale is expected to fetch Rs 1,200-1,300-crore.

Proceeds from fresh issuance will be used to purchase cloud computing equipment for the company's data centres, long-term working capital requirements as well as repay or prepay some of the term loans and general corporate purposes.

The equity shares of both companies will be listed on the BSE and NSE.