Sterlite Tech shares gain 5% as arm wins $1.2 billion supply agreement

Sterlite Technologies Ltd shares rose 5% in Thursday's trade after a wholly-owned subsidiary of the company received a long-term supply agreement with a potential value of up to $1.2 billion.

The agreement has been secured by Sterlite Technologies Inc, a wholly owned subsidiary of Sterlite Technologies. Under the deal, the subsidiary will supply optical connectivity products to a hyperscale partner, with the agreement running until December 2030.

Sterlite Technologies shares rose 5% from the previous close of Rs 908.90 to hit a high of Rs 954.30 in Thursday's trade. The stock opened at Rs 954.30 and touched a low of Rs 886.85 during the session.

Under the agreement, the allocation of optical connectivity products will be made for each calendar year from CY26 to CY30. Purchase orders will be released periodically during the contract period, according to the company's exchange filing.

The agreement also establishes a reciprocal risk-sharing framework between the two parties, with mutual capped financial liabilities in the event of demand or supply capacity shortfalls or failures.

The contract is an international order, with the nature of the order being the supply of optical connectivity products as per customer specifications. The total potential value of the order has been estimated at up to $1.2 billion over the contract tenure.

The company said the order was awarded by a hyperscale partner. The filing did not name the customer and stated that the promoter or promoter group has no interest in the entity awarding the contract.