Sebi Seeks Clarification from Sterlite Electric on Anil Agarwal's Promoter Status
India's securities regulator has raised pointed questions about the ownership structure of Vedanta Group's Sterlite Electric. The Securities and Exchange Board of India (Sebi) wants the company to explain why billionaire founder Anil Agarwal is listed as a promoter when he holds no direct shares in the power transmission firm.
IPO Faces Regulatory Scrutiny
Sterlite Electric filed its draft red herring prospectus for an initial public offering last year. Sebi placed the IPO on hold in October 2025. The regulator has now asked for detailed information about how Agarwal benefits from the company despite his zero direct equity position.
Three sources familiar with the matter confirmed Sebi's request for clarification. The regulator specifically wants to understand Agarwal's relationship with Twin Star Overseas Ltd, which is selling shares through the offer for sale component of the IPO.
Twin Star Overseas holds 69.46% of Sterlite Electric's pre-IPO equity capital. This Mauritius-based entity lists Vedanta Inc. as its 100% shareholder. However, the draft prospectus shows no individual holds 15% or more voting rights in Vedanta Inc.Family Members Refuse Promoter Designation
Sebi has identified another complication in the IPO process. Five of Anil Agarwal's in-laws have declined to be identified as members of the promoter group. These individuals have not provided required information about their financial interests in Sterlite Electric.
Under Indian securities law, immediate relatives must typically be included in the promoter group to ensure full transparency. The company's letters to these five relatives have gone unanswered, leaving bankers unable to certify that IPO disclosures are complete.
The promoter group excluding these non-cooperating relatives holds just 0.88% pre-offer stake. This group includes Agarwal's wife, his two brothers, and his sister. His recently deceased son and daughter are also listed but own no shares in the company.
Legal Expert Explains Regulatory Concerns
Hardeep Sachdeva, senior partner at law firm AZB & Partners, explained the regulatory perspective. "SEBI's role is to ensure that investors have a clear picture of who ultimately controls or influences the company," he said.
"When a founder is designated as a promoter despite holding no direct shares, SEBI must scrutinize the indirect mechanisms of control—such as family ties, board influence, or beneficial ownership structures."
Sachdeva noted that non-cooperating individuals in IPO processes are relatively uncommon but do occur. Companies must either persuade such individuals to cooperate or provide evidence to Sebi that their inclusion isn't material to the promoter group's functioning.
Company Responds to Regulatory Queries
A Sterlite Electric spokesperson stated that the company is actively discussing matters with the regulator. "We are responding to all queries," the spokesperson said in an emailed response. "The company follows the prescribed process of addressing matters relating to the offer through disclosures contained in the statutory offer documents."
The IPO moved out of abeyance in early December 2025, but Sebi continues to await clarifications from lead managers as of January 9, 2026. The company originally filed for a ₹1,250 crore IPO in 2021 but withdrew it citing market volatility.
Broader Context for Vedanta Group
This IPO delay represents another challenge for the Agarwal-led business empire. The group has been seeking to list its power transmission unit to reduce debt and fund capital expenditure.
Sterlite Electric operates in over 70 countries and reported revenue of ₹4,956 crore in fiscal year 2025. The company demerged from Sterlite Technologies in 2016 as the group decided to focus on telecom and power businesses independently.
The regulatory scrutiny comes amid broader questions about Vedanta Group's structure. In July 2025, US-based Viceroy Research raised concerns about the group's financial sustainability, though Vedanta rejected these claims as unfounded.
