"GIC Partners with Vedanta's Sterlite Transmission in $1 Billion Venture"

Sterlite Power Transmission (SPTL), a subsidiary of the Vedanta Group, is teaming up with Singapore's sovereign wealth fund, GIC, to create a $1-billion joint venture platform. This strategic collaboration aims to tap into the growing demand for power evacuation networks in India, as reported by The Economic Times (ET).

Currently, SPTL is in the process of dividing its operations into two distinct businesses. One segment will focus on the infrastructure division, responsible for developing and operating power transmission assets under the build-operate-transfer (BOT) model. The other segment will house the domestic manufacturing business specializing in cables and conductors.

GIC is set to invest $500 million in the infrastructure business, securing a 49 percent stake. The deployment of funds will occur in multiple tranches, with an initial investment of $100 million, followed by an additional $400 million over the next two to three years, subject to the need and project tenders won by Sterlite Power.

As part of this partnership, GIC aims to become Sterlite's exclusive partner in India's transmission sector, as it strives to capture a more significant share of the market. India has witnessed the bidding of annual cumulative projects worth Rs 10,000-12,000 crore since 2010-22. The possibility of deploying additional capital beyond the initial $500 million remains open.

Sterlite Power intends to transfer four assets with a combined enterprise valuation of $722.60 million into the joint venture. Additionally, the company has the option to invest up to $300 million in cash over a similar two to three-year timeframe. This strategic investment will also allow Sterlite Power to retain its 51 percent stake in the joint venture.

An official from Sterlite Power emphasized the company's plans to bid and construct more aggressively in the transmission segment, highlighting the importance of robust capital support for success in this scale-driven industry.

This collaboration signifies the companies' commitment to further strengthening India's power transmission infrastructure and addressing the nation's increasing energy needs.

BS