Sterlite Technologies Limited (STL) has received approval from the National Company Law Tribunal (NCLT), Mumbai Bench, for the demerger of its Global Services Business (GSB) into a separate entity, STL Networks Limited. The move aims to enhance focus on the company’s core Optical Networking Business (ONB) while allowing STL Networks to expand its telecom infrastructure and services segment.
Key details of the demerger
Under the approved Scheme of Arrangement, STL shareholders will receive 1 share of STL Networks Limited for every 1 share held in STL, ensuring that their economic interest remains unchanged. The appointed date for the demerger is April 1, 2023, and STL will notify stock exchanges once the effective date is finalized.
Regulatory compliance and strategic goals
STL has confirmed compliance with SEBI, Income Tax, GST, RBI, and other statutory regulations to ensure a smooth transition. The demerger aligns with India’s growing 5G and telecom infrastructure expansion, allowing STL to concentrate on its fiber optic networking business, while STL Networks focuses on end-to-end network deployment and services.
Next steps and market impact
The NCLT order directs STL and STL Networks to file certified copies with the Registrar of Companies (RoC) within 30 days. Investors will now closely monitor STL’s stock performance as the market reacts to the restructuring. The demerger is expected to provide greater operational efficiency and value creation for shareholders in the long run.
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