The demerger of Sterlite Power Transmission Limited’s (SPTL) transmission division has been approved by equity owners, secured creditors, unsecured creditors, and non-fund-based lenders. 100% of secured creditors, 99.26% of unsecured creditors, 99.99% of existing and voting equity owners, and 100% of non-fund-based lenders approved the demerger plan.
The demerged Transmission Infrastructure, which (will be incorporated under Sterlite Grid 5 Limited), and Global Products & Specialized EPC Services, (which will stay under SPTL), will benefit from the proposed demerger by having more flexibility and focus to pursue their own independent growth strategies.
Now Sterlite Power and SPTL will be able to draw in a capital pool that is customized to meet its needs thanks to the streamlined structure confirmed the official release.
While SPTL, which focuses on the Global Products & Services (GPS) sector, might attract money-seeking greater returns generally suitable for pre-IPO or capital market investors, the infrastructure company can target long-term, patient investors seeking consistent cash flow.
Pratik Agarwal, Managing Director, Sterlite Power Transmission Limited, said, “This support from our stakeholders validates the strategic rationale behind the demerger. It is a significant milestone in our journey to create two future-ready businesses with distinct growth trajectories.”
The GPS business achieved cumulative order wins of INR 7,000 crores, capping up a strong FY 24. It was a 35% YoY increase over FY23, highlighting the rising need for reliable power transmission infrastructure both domestically and internationally, especially to facilitate the integration of renewable energy sources, revealed the official release.
Additionally, Sterlite Grid 5 is in a good position to benefit from the significant expansion of the transmission infrastructure market.
Large-scale HVDC and green energy corridor projects are part of a robust STPL transmission pipeline worth INR 100,000 crores that has been sanctioned and will go up for bid in the upcoming years through a competitive procedure. The quickening speed of intrastate and interstate developments is fostering a robust pipeline and will enhance opportunities for developing renewable energy projects.
In order to accommodate the rapid influx of renewable energy, the power transmission network is predicted to quadruple globally over the next eight years.
Over the medium term, it is anticipated that demand for Power Products will continue to be robust due to robust demand, aggressive global capital expenditures allocated to the construction of T&D and Renewables capacity, the advantages of the “China+1” theme, and advantageous tariff arrangements in the US.
