Mumbai: ABB India’s board on Friday approved the demerger of the company’s power grids business to ABB Power Products and Systems India Ltd (APPSIL).
The move is likely to position the company with a leadership role in digital solutions and evolving technologies like artificial intelligence while allowing APPSIL to independently focus on a likely leadership position in the power grids business with established market dynamics.
The simplification of the company’s business model and structure with the implementation of this new organization is expected to provide each business with full operational ownership of products, functions, R&D, and territories.
After the demerger, the minority shareholders will be issued one share of APPSIL, which will be listed on the stock exchanges, for every five shares held in ABB India, the company said in regulatory filings at stock exchanges.
The power grids business had a turnover of Rs 4,171.78 crore in 2017-18, accounting for 38.4 percent of the total turnover and includes revenues from a one-time large order of high-voltage direct current from Power Grid Corporation of India.
The proposed demerger is expected to assist the current power grids division to independently pursue the business excellence built over a long period in the power infrastructure with its robust and time tested business model, the company added.