Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance Security Analysis - II - Question Paper

The telecom industry globally is building high capacity networks as service providers are setting up new forms of valuable traffic. Wireline is optimized to give high-speed data applications as against wireless, which has limitations in terms of bandwidth and spectrum, when it comes to high-speed data. The global pattern clearly indicates that to support high speed broadband networks, and to give platform for network management services for large firms, and also for new offerings like triple play, ethernet leased lines, bandwidth-on-demand etc, new optical transmission networks are needed. India is now 1 of the fastest growing telecom markets having achieved significant growth in tele-density predominantly in urban & semi urban segments. The thrust areas are now rural tele-density & broadband penetration. The requirement for both is long reach & high bandwidth. Statewide networks like the AP Broadband Network address all the priorities and could be the precursor to other states wide network. Public as well as private sector companies are planning/rolling nationwide networks based on optical core. This translates into significant increase in demand for Optical Fiber Cables Industry.

Sterlite Optical Technologies

Business Profile

The Company was formed by the demerger of the erstwhile telecom division of Sterlite Industries (India) Limited with effect from first July 2000 to enable a sharper focus on every of the businesses. Sterlite Optical Technologies (SOTL), after being demerged from Sterlite Industries (India) Ltd, has signed a memorandum of understanding (MoU) with General Cable Corporation (GCC) 3rd largest wire and cable company in the world, a US-based wire and cable manufacturing company to form a 50:50 joint venture (JV). As per the Scheme of Demerger the company has allotted 5,59,12,559 number of equity shares of face value Rs five aggregating Rs 27.95 crore as per the Scheme. Sterlite Optical Technologies Limited is 1 of the leading developers and manufacturers of Optical Fibers and Fiber Optic Cables worldwide. It is India’s only fully integrated Optical Fiber producer and 1 of the largest suppliers of Optical Fibers to overseas markets in China, Europe and South East Asia. Sterlite Optical Technologies is the only company to be awarded the ‘Top Telecom Cables Company’ in India, thrice in the past 4 years, as per the annual V&D 100 Survey. The company has a world class Optical Fiber manufacturing plant located at Aurangabad, India and Telecom Cable plants at Silvassa, India.

Earning:   Approval pending.