Sterlite Power Transmission may consider listing post demerger: MD

Sterlite’s manufacturing arm, Global Products and Services, produces power transmission components, including conductors, power cables, and overhead wire cables.

In November, the company had announced the demerger of its transmission business into a separate entity. In an interview, Agarwal said the company is awaiting the approval for the demerger from the National Company Law Tribunal (NCLT) and expects the process to be completed by the second quarter of FY25.

“The most suitable business for the public markets is our manufacturing business. There are multiple listed players in that space—some are in B2B, some in B2C—and some are capitalizing on the Indian growth story. We are also riding a global growth wave, with 50% of our business coming from exports. We have 40 customers across the US, Europe, Latin America, Southeast Asia, and Australia. So, it is very suitable. Post-demerger, we will evaluate all fundraising options,” he added.

“We have no urgency, but we will certainly evaluate all options. If the markets are favourable and, depending on investor interest, we will surely consider a listing of the manufacturing business.”

The company is also considering expanding its existing manufacturing facilities in India, besides setting up a new facility, Agarwal said. “The total investment for expansion (both brownfield and greenfield) should be in the range of ₹350-400 crore.”

The manufacturing business is projected to grow 20-30% in FY25, buoyed by the around ₹2 trillion worth of central sector transmission projects in India.

The company is also in talks with private equity investors for raising funds for its transmission business, he said. “That is the business where we operate like a highway operator, where we build, own and operate transmission lines, providing transmission services to end users, generators, and consumers. That business is growing very, very fast. And then we’re looking at closing a large transaction with a very large investor, which we hope to finalize soon.”

The company’s transmission division also operates in Brazil. It boasts a portfolio of 30 completed and ongoing projects, totaling around 14,602 circuit kilometers (ckm) of transmission lines across India and Brazil. It is  focussing on consolidating its presence further in India’s transmission sector.

Agrawal, the chairman of SPTL subsidiary Serentica Renewables, said the company is furthering its ambitions in the round-the-clock renewable energy solutions. “At Serentica, we aim to provide round-the-clock renewable energy solutions to large factories by selling renewable power. These large-scale, energy-intensive factories currently rely on thermal power consumption. Our goal is to replace 15-50% of their thermal power with renewable power.”

“Currently, one of the most interesting opportunities in the whole decarbonization space is how to replace carbon consumption of these large factories, which are responsible for consuming 80% of greenhouse gases worldwide, with renewables,” he said.

“We will certainly deploy batteries across our fleet in different shapes, forms, and sizes. Additionally, we will explore alternative forms of storage, whether owned by us, or by a third party, and then contracted to us.”

On 20 March, Mint reported that Serentica was planning to sell a minority stake to raise around $300 million to fund its ambitious growth plans.

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Published: 24 Mar 2024, 08:11 PM IST