Amara Raja Energy & Mobility (ARE&M), a subsidiary of the Amara Raja Group, is seeking external funding options, including debt, equity, or a combination of both, to support its ambitious plan of investing ₹9,500 crore in establishing a gigafactory corridor in Telangana. The company is currently funding its initial phase through internal accruals and borrowings but anticipates the need for external capital as it scales operations.
According to AREM Chairman and MD Jayadev Galla, while the first phase is manageable internally up to 8-10 GWh capacity, beyond this scaling up would definitely require equity raise. Production of battery cells, packs and chargers for EVs would be driven by its subsidiary Amara Raja Advanced Cell Technologies. The process of building a 16-GWh lithium-ion cell production facility and battery pack assembly plant in Telangana is already begun by the company.
The company could consider diluting its stake once 50% of the envisaged production capacity is reached, according to Galla, and it may even look at an IPO, though nothing on this has been decided as yet.
AREM Executive Director Vikramadithya Gourineni said that the New Energy and Mobility Business division—including cells, packs, chargers, energy storage systems—was likely to contribute $2–3 billion to group revenues by 2030. He said funding would be finalized only after working out the details of the investment plan, which would be of a huge magnitude.
But, even as it enters this new energy focus, Amara Raja has said its traditional lead-acid battery business will also ride this scaling and double revenues to $3 billion in seven-eight years.
This move reflects Amara Raja’s strategic shift towards the rapidly growing EV market while maintaining its strong presence in the lead-acid battery segment.
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Source: Moneycontrol
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