Sterlite Industries raises $1.5 billion in ADRs to part-finance power projects in India
17 Jul 2009
Sterlite Industries, part of the London-listed Vedanata Resources, on Wednesday raised $1.5 billion (about Rs7,200 crore) taking the ADR route. The move has revived hopes of similar offerings by other companies especially in the power sector.
The company has said it would use the funds – the first ADR for an Indian company in two years to part finance its power generation plans and other planned capex programmes. The break-up of the $1.5 billion the company has raised is - $500 million from parent Vedanta and $1 billion through institutional investors.
The company's move, according to analysts, is aimed at retaining its stake in Sterlite at 61.7 per cent.
The bookrunners to the issue were JP Morgan and Morgan Stanley. The issue was priced at $12.15 at a 6.1 per cent discount to the company's Wedenesday close.
Sterlite's ADS issue marks the launch of a serics of measures that would soon include acquisition of mining assets in Africa and Central America according to chairman Anil Aggarwal.
Sterlite's power plans would be built through wholly-owned subsidiary Sterlite Energy. The company is setting up two commercial power plants at Jharsuguda in Orissa and at another location in Punjab. The Jharsuguda plant has a capacity of 2,400 mw while the Punjab plant will generate 1,980 mw. The total investment is estimated to be in the region of Rs15,000 crore.