NEW DELHI: After exiting its power grid business globally, the Indian arm of ABB Limited will now hive off its domestic business, which contributes about 40 per cent to its revenue.
The board of the Swedish multinational had, on February 13, approved the demerger of its domestic power-grid unit from its other businesses.
At another meeting held on March 5, the company said that its discontinued business would be demerged to its newly incorporated wholly-owned subsidiary, ABB Power Products and Systems India Limited (APPSIL), pursuant to a scheme of arrangement. The board of the new entity approved the scheme on the same day. ABB India expects the demerger to be completed by June 2020.
ABB said the shareholding pattern of the company will not change pursuant to the demerger. Issue of equity shares by APPSIL will allow shareholders of ABB India and APPSIL to invest in the distinct key businesses to unlock the value of their investments.
Eyeing new biz
The company said that it would realign its business to focus, simplify and lead in digital industries and its key verticals will now be electric mobility solutions, robotics and electrification products and industrial automation.
“Our businesses in India are being profoundly impacted as customers are now looking for more complete solutions, combining the right products with engineering expertise and domain capability amid continuous advances in technology,” the company said, adding, “That said, the focus on digital industries would be fruitful as against the slower-cycle, government-influenced, financing support-enabled large projects of power grid business.”