Sterlite Technologies Ltd has announced the completion of the demerger of its power business into Sterlite Power Transmission Ltd effective from the appointed date of April 1, 2015.
Sterlite Tech, the listed entity, now becomes a pure play telecom player. With significant debt reduction on its balance sheet, improved return ratios, a high cash generating business, which has a strong growth outlook, gives it a better financial profile from the investors’ perspective.
The power company remains an unlisted entity.
The demerger scheme was earlier approved by the High Court of Mumbai on April 22, 2016, post approval by all relevant stakeholders of Sterlite Tech on December 15, 2015.
In its filing to the stock exchanges, Sterlite Tech also announced completion of Elitecore Technologies’ merger, which is a global provider of Operation Support Service (OSS) & Business Support Service (BSS) solutions. Its pre-integrated platform has the capability to monetise all IP networks including 3G/LTE, Wi-Fi, Cable, ADSL and FTTH. Sterlite Tech had acquired Elitecore Technologies in 2015. The merger of Elitecore with Sterlite Tech will allow for the seamless integration of two companies leading to stronger customer offerings as one telecom entity.
Sterlite Tech has been in the transformation phase for the last few years from a manufacturing play to a specialty business model straddling the entire telecom value chain by significantly expanding its its presence in solutions, software and services.
As part of the transformation, Sterlite Tech has implemented a new brand identity and logo. The new avatar of Sterlite Tech is the world’s leading and India’s only vertically integrated optical communication products, services and software company.
It aims to transform everyday living by delivering smarter networks. Over the past few years, Sterlite Tech has been closely involved in India’s nation building efforts, working with governments and private operators to build best-in-class broadband infrastructure.
On the international front, the company is strengthening its existing global footprint in 75 countries and furthering customer engagements. Through its manufacturing facilities in India, China and Brazil, Sterlite Tech is already a major supplier to global telcos with a supply footprint across 20 countries. Globally, optical fibre demand was close to 370 million fkm last year, and continues to have an optimistic outlook in the backdrop of growing data consumption.
Pravin Agarwal, Whole-Time Director & Vice-Chairman, Sterlite Technologies, said, “The last few years have seen Sterlite Tech grow rapidly, and we have developed breakthrough innovations with over 100 patents. As we ready ourselves for the next big evolution, the demerger gives us a unique and compelling business model to respond to a dynamic market scenario, and in the process create maximum value for our stakeholders.”
Dr Anand Agarwal, CEO, Sterlite Technologies, added, “This restructuring underscores our commitment to India’s broadband transformation. We enjoy a distinct and formidable advantage of powering the digital revolution for India, and in the process, transforming millions of lives across the country. The de-merger puts us in an even better position to serve our nation, and create great products and services for our customers and partners alike. We remain committed to making India truly digital.”
On the BSE, the Sterlite Tech share was trading at Rs 88.55 apiece, a loss of 0.39 per cent.