MC EXCLUSIVE Resonia betting big on power transmission, to invest Rs 1 lakh crore by FY32: Chairperson Pratik Agarwal

Pratik Agarwal is the managing director of Sterlite Electric and the chairperson of Resonia.

In February, Vedanta Group-owned Sterlite Power demerged into two companies – Sterlite Electric for manufacturing transmission cables and equipment and Resonia Ltd to expand its transmission infrastructure business.

In his first interview since the demerger, Pratik Agarwal, who is the managing director of Sterlite Electric and the chairperson of Resonia, told Moneycontrol that India now has the largest greenfield transmission BOT (build, operate, transfer) market in the world, even bigger than China, Europe and the US.

Agarwal, also the chairperson of Vedanta’s green energy arm Serentica Renewables, said the private sector has in it to meet the growing demand for power from the commercial and industrial (C&I) sector. Edited excerpts of the interview:

You are a leading player in the power transmission infrastructure sector. Why has connecting renewable energy projects become such a big problem? Several projects have slowed down because of this hurdle.

Earlier, we mostly had thermal and hydro, which would take four-six years to be built. Transmission (infrastructure) to connect these projects also took similar time to be ready but all of that changed three years ago when we saw an influx of renewable projects in India.

Renewable energy projects typically take just 18-20 months from land acquisition to installation. But the transmission sector hasn’t changed, as it still takes us four-six years to complete a project. Mind you, India is still better compared to other countries. In the US, for example, it still takes 10 years to set up transmission infrastructure.

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Hasn’t technology advanced enough to reduce the time it takes to set up transmission infrastructure?

Transmission takes so long because of right-of-way issues. Our population density is nine times that of the US. Some parts of India such as Kerala and West Bengal have population density that is three times the national average. If you’re building a power line from Jaisalmer to, say, Gurugram with 5,000 towers, you may have built 4,990 towers, but if the last 10 towers have a stay order or injunction on the right-of-way, the 4,990 have no value.

In power generation, say you plan a 1,000 megawatt (MW) solar plant and even if you have built only 900 MW, you can start generating. But in transmission, if you’ve built 90 percent, it has no value because it’s a linked system.

Secondly, we have mechanisation issues. The amount of labour you need to build a transmission line in India is 10 times the labour you need in Europe for the same land. The government should consider offering incentives for manufacturing heavy machinery and automation.

Thirdly, there are delays on approvals. A developer building a transmission line will have 20 highway crossings, 30 transmission line crossings, pipeline crossings, mine crossings and so on. Every single time, you require approval from each of these authorities.

So, the uncertainty in a transmission line is significantly higher. But, transmission today is behind generation across the world, not just India.

What is your growth plan for the three companies?

For Serentica Renewables, we are betting big on the commercial and industrial (C&I) segment. India’s C&I is already delivering a revenue of about $40 billion annually. Our estimates suggest this is going to double to $80 billion by 2031-32.

We are going to be a company with a capacity of 4,000 MW by the end of this financial year. By 2030, we intend to have a capacity of 13,000 MW in addition to 6,000 MWh of storage. We are also well-funded, with over $650 million in commitments from KKR and rest coming from the family.

Coming to Resonia Ltd, in FY25, India awarded around Rs 1,15,000 crore in transmission work and Resonia has about 20 percent market share in that outlay. The company is managing assets worth about Rs 30,000 crore, which includes operational and under-construction assets. We expect to add works worth Rs 10,000 to 15,000 crore every year. By FY32, we expect Resonia to reach around Rs 1 lakh crore of assets under management.

Sterlite Electric is one of the largest players in the country for conductors and extra high voltage (EHV) cables, and we’re exporting to more than 40 countries. We expect a turnover of about Rs 6,500 crore in the current financial year. We plan to double this in the next three or four years by expanding into high-end cable manufacturing such as HVDC (High Voltage Direct Current) and even submarine cables. Ultimately, we’ll expand into other transmission and distribution (T&D) equipment such as power electronics, substation equipment and even software and digital services for T&D equipment.

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How would the proposed US tariffs impact Sterlite Electric's exports?

Historically, the US was an important market but our current order book actually has almost no US contracts. It happened by chance. Right now, our focus is on Latin America, Australia, Southeast Asia and the Middle East.

That being said, we believe India will benefit from the differential tariffs between China and India. We don’t think the US will quickly ramp up its transmission equipment capacity. It will take a few years and during that time, non-China countries with manufacturing expertise like India will benefit from the tariff regime.

As for the other two businesses, Resonia has no plans to enter other markets. India has the largest greenfield transmission BOT (build, operate, transfer) market in the world— larger than China, Europe, and the US. With such a large OEM market in India, it doesn’t make sense for us to look at other markets right now.

Serentica is also focused on India, where we see the largest opportunity for growing a commercial and industrial (C&I) business in the world. The power demand by C&I could be completely met by market forces (private players) like Serentica, Adani, Jindal, or even new discoms. Everyone will compete, and the fittest will survive.