Sterlite Power, a subsidiary of Vedanta Group, plans to invest $1-2 billion in its transmission business every year, and another $100 million in manufacturing, as part of plan to double revenue from this segment to Rs 12,000 crore, Pratik Agarwal, Managing Director, Sterlite Power told Arunima Bharadwaj in an interview. The group also plans to expand its renewable energy capacity by adding 2 giga waatt (GW) annually, starting FY26, Agarwal, which is on the board of group firm Serentica Renewables, said. With no overseas expansion plans right now, Agarwal sees India as a viable market for low-cost manufacturing for advanced products. Edited Excerpts:
What are your future growth plans for Sterlite Power and group firm Serentica Renewables? What kind of investment plans are being lined up for the two?
Serentica (RE) and the transmission are both capital-intensive, and in both these businesses, we expect to invest $1-2 billion every year for new asset creation. Manufacturing business is less capital-intensive, and there we plan to spend about $100 million in capex over the next few years. We aim to double revenues from Sterlite Power’s manuacturing business to Rs 12,000-13,000 crore in the next two years.
Further, in renewables, we currently have contracts to supply 10 billion units (BU) of power every year and in the next five years, we hope to take that number to 40 BU. At 40 BU, 2% of India’s total power consumption will come from Serentica.
What are the new power transmission projects under progress?
In power transmission, we are currently executing eight projects and have one operating project. So all these nine projects put together, the total value is roughly Rs 16,000 crores and the non-operational units will be commissioned progressively every quarter. We have won three projects in the last six months, all in Rajasthan with a value of over Rs 6,000 crore.
How does the company plan to expand its portfolio in power products?
In power products, we plan to grow our manufacturing base and increase revenue from the current Rs 6,000 to Rs 11,000-12,000 crore. We will expand our portfolio of value added products which are the higher-margin ones, with high-performance conductors, extra high voltage cables, solo cables etc. In the times to come we will also like to enter into HVDC cables and submarine cables.
In terms of orders, we have many. But yes, there are lots of new transmission projects in the world which need overhead conductors and India and Sterlite are a rational choice for those projects.
What is the update on Sterlite and GIC partnership?
Officially we can’t talk about it. All I can say is that we are always in discussions with investors. We are in discussion with one at the moment, are yet to announce anything. It should be finalised by the end of the current financial year.
How does the company plan to expand its RE capacity and what are the investment plans for the same?
We are currently adding 4 giga watt (GW_ of wind and solar capacity across three states which is Rajasthan, Maharashtra, and Karnataka. These should be commissioned by FY25 and FY26 and have an investment plan of Rs 25,000 crore. Parallely, we are also developing more projects which are in the construction phase. We will add about 2 GW of capacity every year starting FY26 with an investment of Rs 15,000 crore each year.
What are the company’s global expansion plans?
Our transmission business has a Brazil subsidiary. And in Brazil, we are doing one-billion-dollar worth projects, some operational and some under construction. We don’t currently have plans to grow that too much. Much of our growth will be focused in India.
In our renewable business, again for the next two years, we don’t have any plans to grow internationally. But in our products business where we are already exporting 50% of our products to western markets, that is something we are looking to grow. And our export base will keep growing. We may even evaluate a facility outside India but those are in very early stages. India is a good hub for low cost manufacturing for advanced products so that’s our focus.