Sterlite Power buys 28.4% stake from SCPE for Rs1,010 crore

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With this Rs1,010 crore acquisition, Sterlite Power owns 100% stake in its transmission business

Mumbai: Sterlite Power on Monday said it has bought Standard Chartered Private Equity (SCPE)’s 28.4% stake in its transmission business for Rs1,010 crore.

“With this acquisition, Sterlite Power holds 100% stake in the business. Sterlite Power had attracted an investment of Rs500 crore in 2014 from SCPE, which was the first private foreign investment in the Indian transmission sector,” Sterlite Power said in a statement. This comes against the backdrop of growing consolidation in India’s electricity transmission space.

Mint reported on 15 January that renewable energy company Greenko Group is in talks with Essel Infraprojects Ltd to acquire its power transmission business for an estimated $1 billion.

“Over the last three years, Sterlite Power has grown its portfolio from three projects in India to fifteen projects across India and Brazil and now has a footprint in 26 states across two continents,” the statement added.

Transmission projects are considered a safer bet, given the annuity nature of the business and risks such as land acquisition, right of way and forest clearance being restricted to the construction stage.

“With this acquisition we reiterate our excitement about the unprecedented growth opportunity in the power transmission sector,” Pratik Agarwal, group chief executive of Sterlite Power, said in the statement.

Sterlite Power has transmission projects of around 10,000 circuit km in its portfolio. It won an 1,800km transmission project in Brazil last month for $800 million. Sterlite Power also sponsors IndiGrid, India’s first power infrastructure investment trust, listed on the BSE and NSE.

InvITs are trusts that manage income-generating infrastructure assets, offering investors regular yields and a liquid way to invest in infrastructure projects.

The interest in electricity transmission space has been picking up with India’s clean energy firms looking at diversifying across the electricity value chain to derive better value.