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00:00 Let me start by just giving you a context setting to begin with.

00:04 So one of the largest themes that the society is currently experiencing is the theme of

00:10 decarbonization.

00:11 And this is a 20 to 30 year theme that will prevail across the world.

00:15 And this theme will attract capital in many parts of the entire energy value chain.

00:20 So we at Sterlite, we are offering investors an opportunity to play this theme through

00:25 multiple ways.

00:27 One of them is our manufacturing business, which is the products and services business.

00:30 One of them is a transmission BOT business.

00:33 And the third one is around the clock renewable business where we serve large CNI clients

00:37 and provide them around the clock green power.

00:40 So all of these are basically riding the same wave, which is global decarbonization.

00:46 Now coming to the question on demerger, we have this company Sterlite Power Transmission

00:50 Limited, which has two businesses.

00:53 One of them is the GPS, the global products and services business, where we have roughly

00:57 six to 7000 crores of turnover, which sells products and services that go into the global

01:03 transmission sector.

01:05 The second business is where we are a BOT operator.

01:08 We are the second largest in the country and largest in the private sector, where we build

01:12 on and operate transmission assets.

01:15 And we have more than 25,000 crores of track record in India at the moment.

01:19 Now both these businesses, while they are serving the same sector of transmission, but

01:23 they're very, very different business models.

01:26 It's like one is a cement business and one is a real estate business.

01:29 So both are very, very different.

01:30 Therefore, based on the feedback we got from advisors and investors, we have decided to

01:35 demerge these two.

01:36 One will be a standalone manufacturing and services business.

01:39 And the second one will be the BOT business.

01:41 Okay.

01:42 And if you can talk about in terms of value also, what kind of value unlocking you see

01:47 for the two businesses now, once the demerge happens?

01:51 So see, value is in the eyes of the investor.

01:56 And both of these businesses have a unique set of investors.

02:00 The investors that typically love manufacturing capital goods businesses and love the power

02:05 sector are one set.

02:07 And globally, this is a big theme.

02:09 Then there's altogether different set of investors who like long term infrastructure play and

02:14 they like to invest in annuity like assets, especially transmission assets.

02:18 So once these companies demerge, both sets of investors will be able to pick and choose

02:24 which company they want to invest in.

02:26 And generally such demergers historically have always created huge shareholder value.

02:30 As each business gets its due value, and all the investors that are interested in that

02:34 business can finally invest in that business.

02:37 Our manufacturing business has many peers.

02:40 They are doing extremely well in the stock market.

02:44 Of course, we are unlisted at the moment, we'll look at listing in the near future.

02:48 But all investors can certainly expect overall value unlocking, both as a result of the demerger,

02:54 but also as a result of the underlying tailwinds that both these sectors are currently witnessing.

03:01 If you can talk about both the businesses, what is the total order books that we have?

03:06 And what's the kind of visibility we see in the future?

03:09 Sure.

03:10 So I'll try and give you broad numbers.

03:14 Let's start with the transmission BOT business.

03:16 In transmission BOT business, like I said, we are one of the largest, if not the largest

03:21 in the private sector, and we're the second largest in the country.

03:24 We have been in this business since 2010, ever since transmission came up for private

03:30 sector to participate in that opportunity.

03:33 Now, recently, we have announced that one of the largest sovereign wealth funds in the

03:38 world, which is GIC, has agreed to partner with us in this business and will be owning

03:43 a large stake in this company.

03:46 And together we will look to build about $4 billion worth of assets in this joint venture,

03:51 which is the transmission BOT joint venture.

03:53 To give you a sense of the market size, this business, the country will award roughly $50

04:00 billion worth of transmission projects just in the next seven to eight years.

04:04 In fact, just in the current year, India will award $12 to $14 billion of transmission opportunity.

04:09 Now, from that, historically, we've had about a 20% to 25% market share.

04:14 So today we are executing roughly 12,000 to 14,000 crores of projects, and we are expecting

04:22 to win, and very soon we think we will win many more projects in that space.

04:27 So that's as far as the transmission BOT sector is concerned.

04:31 Our products business, we have an order book of somewhere between 7 to 10,000 crores currently,

04:38 and we are looking to grow.

04:39 We have three verticals.

04:40 One of them is the overhead conductor business.

04:43 Second is the underground cable business.

04:45 And third is the MSI business, where we do services using our products.

04:50 And each of the businesses are witnessing a 12% to 20% KGAR annual growth rate.

04:56 And this is driven by a very simple theme, that the whole world is looking to add renewable

05:01 energy capacity, be it North America, South America, Europe, Asia, Australia.

05:07 Every single part of the world is adding huge renewable capacity.

05:11 And each time any country adds renewable capacity, they need to build more transmission capacity.

05:17 And all of that transmission capacity requires our products.

05:20 We are amongst the top five, top eight in the world, minus China, in those products.

05:24 And therefore, we're a natural partner for most of the utilities around the world.

05:28 [MUSIC PLAYING]

05:31 (electronic music)

How Sterlite Power Stands To Benefit From Demerger | NDTV Profit

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