Sterlite Power Secures Rs. 725 Cr. Funding for Business Expansion
Sterlite Power Transmission Ltd. (SPTL or Sterlite Power), has secured Rs. 725 crore as funding from US-based GEF Capital Partners, LLC, and Mumbai-headquartered ENAM Holdings Pvt. Ltd. This informantion was shared by Sterlite Power in its press release dated 16th December 2024.
Funds to be Invested in SPTL’s Global Products & Solutions Business
Sterlite Power will be utilising the aforementioned funds to further its Global Products & Solutions (GPS) business. SPTL’s GPS business deals with manufacturing and supply of power cables, conductors, and Optical Ground Wires (OPGW). Sterlite Power mentioned in its release that these funds will be utilised towards “…enhancing production capabilities, accelerating new product development, and expanding presence across key international markets”.
While talking to the Economic Times about the funds raised, Mr. Pratik Agarwal, MD of Sterlite Power, said, “GEF Capital is putting in Rs. 450 crores, and the balance is coming from ENAM Holdings”. Interestingly, both GEF Capital and ENAM Holdings are ‘single-digit’ minority shareholders in SPTL, although their exact stake in the company is not clear.
“Securing Funding a Significant Milestone” – SPTL MD
Aforementioned fundraise marks the first major fundraise for the company’s GPS business. Mr. Agarwal explained, “Securing this funding marks a significant milestone for Sterlite Power’s GPS business”. He added that through these funds, SPTL will be better positioned to deliver power solutions to support demand growth on account of ongoing energy transition initiatives and Renewable Energy (RE) growth in India and overseas.
Greenfield Plant in Baroda Planned for 400 KV Cables
A sum of INR 400 Cr. from the aforementioned raised capital will be used by SPTL towards setting up a greenfield plant for 400 KV power cables in Baroda, Gujarat. However, Sterlite Power has not disclosed any further details about this planned expansion for EHV cable manufacturing in Gujarat.
Explaining the rationale behind this expansion, Mr. Agarwal added that this expansion is in light of the ongoing electrification and decarbonisation initiatives picking up, which in turn is driving cable demand. Therefore, he indicated that SPTL’s planned EHV cable plant in Gujarat will help the company capture a larger share of India’s EHV cable market.
It must be noted that SPTL already manufactures EHV cables of upto 400 KV.
As for the balance amount, SPTL will utilise it as working capital, and towards other opportunities. However, the nature of these ‘other opportunities’ has not been specified.
Need to Expand EHV Cable Manufacturing in India
Indian Electrical and Electronics Manufactures’ Association (IEEMA) mentions on its website that some Indian cable manufacturers have set up EHV cable (upto 400 KV) manufacturing plants in the country through technical collaborations, or in joint ventures. Currently, some major companies apart from Sterlite Power which manufacture EHV cables upto 400 KV in India include Finolex Cables, KEI Industries, and Universal Cables.
As per an April 2024 report by Motilal Oswal, the market size of EHV cables is estimated at Rs. 2,500 crore to Rs. 3,000 crore. The report also estimates this market to grow with a Compound Annual Growth Rate (CAGR) of 13-14% till FY-27.
About Sterlite Power Transmission Ltd.: Sterlite Power is a power transmission developer and solutions provider headquartered in Mumbai. During H1 of FY-25, the company has secured orders worth Rs. 2,715 crore. Further, as of November 2024, the company’s open order book stands at Rs. 6,700 crore. Initially, SPTL’s business verticals comprised its GPS business and its transmission infrastructure business. In October 2024, the company formed a new entity, namely Sterlite Grid 5 Limited, to house its transmission infra. business. SPTL’s GPS business continues to be under Sterlite Power Transmission Ltd.