Sterlite Energy, part of the Vedanta group, said it has filed regulatory application for a $1.1 billion IPO on a day a smaller rival slumped on market debut.
The news sent the shares of parent Sterlite Industries (India) Ltd higher by as much as 8.3 percent. At 0720 GMT, the shares were up 6.4 percent at 794 rupees. Sterlite Industries has already raised $2.1 billion in shares and convertibles over the last four months.
The utility joins at least 20 mid to large firms, that are queing up to sell new shares to tap a stock market rally that has seen the benchmark index rise nearly 70 percent so far this year. A successful IPO would make it the second largest Indian offering in recent times behind NHPC's $1.25 billion sale.
"The mood is still strong. People are looking to invest in IPOs but at the right price," said Naresh Kumar Garg, chief investment officer at Sahara Mutual Fund.
"Investors will be cautious and choose IPOs going forward." Garg said Sahara Mutual has been very selective in IPO investment this year.
Three out of the last four large IPOs have had weak openings despite strong subscriptions, with Indiabulls Power opening below issue price on Friday and falling as much as 22 percent in early trade.
And cable television firm Den Networks nearly $100 million IPO, which closes on Friday, is struggling to be covered data with the stock exchanges showed.
Sterlite Energy plans to use the proceeds to part fund two thermal power plants with a combined capacity of 4,380 megawatts, it said in a statement.
Kotak Mahindra Capital Co, Enam, JP Morgan and Morgan Stanley are among arrangers for the offering.
