Step 1: Understanding the question
The question asks for the capital of the Union Territory that was renamed as Sri Vijaya Puram.
We need to determine which Union Territory this refers to and identify its capital.
Step 2: Identifying the renamed Union Territory
The Union Territory of Andaman and Nicobar Islands was renamed as Sri Vijaya Puram.
This change took place in recent years as part of efforts to honor the historical significance of the region.
Step 3: Finding the capital
The capital of Andaman and Nicobar Islands, which was renamed to Sri Vijaya Puram, is Port Blair.
Port Blair is the largest city and the administrative capital of the Union Territory.
Step 4: Conclusion
Therefore, the correct answer is Port Blair, option (2).