Sterlite Technologies demerges power biz, eyes pure-play telecom tag

Sterlite Technologies on Tuesday announced demerger of its power business into Sterlite Power Transmission to become a pure-play telecom firm.

"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," Sterlite Technologies said in a Bombay Stock Exchange (BSE) filing.

"The demerger of power transmission business is a strategic decision that provides a well-deserved value-building opportunity for the telecom business." Sterlite Technologies also announced a completion of Elitecore Technologies' merger, which is a global provider of Operation Support Service (OSS) and Business Support Service (BSS) solution.

Sterlite Technologies had acquired Elitecore Technologies in 2015.

The merger of Elitecore into Sterlite Technologies will allow for seamless integration of two companies leading to stronger customer offerings as one telecom entity.

Sterlite Technologies' whole-time director and vice chairman Pravin Agarwal said, "The last few years have seen Sterlite Tech grow rapidly, and we have developed breakthrough innovations with over 100 patents... the demerger gives us a unique and compelling business model to respond to a dynamic market scenario, and create maximum value for our stakeholders."

The demerger would allow "the company to aggressively pitch for the opportunities of a rapidly changing broadband market, reignite its innovation pipeline, strengthen its go-to-market strategy and unlock greater value for shareholders". 

At 13:07 hours, the shares of Sterlite Technologies were trading down 3.26% or Rs 2.90 at Rs 85.95 per scrip on the BSE.