Amra Raja plans to expand EV battery manufacturing, seek external funding
Amara Raja Energy & Mobility (ARE&M), on Monday, declared its intention to seek external funding options including debt, equity, or a combination of both. Reportedly, the firm is looking for funding to reach its goal of allocating Rs 9,500 crore for the establishment of a gigafactory corridor in Telangana.
Currently, AREM is sourcing its funds by investing through Amara Raja Advanced Cell Technologies (ARACT) and internal accruals. It is to be noted that the ARACT has been previously separated to form a new entity.
"We intend to use our own internal accruals and borrowings to manage during the initial phase of our manufacturing activities when we reach the 8–10 gigawatt-hour (GWH) capacity. However, to go beyond that, equity funding will be required,” according to AREM Chairman and Managing Director Jayadev Galla.
ARACT, a subsidiary entity formed in 2021 is in charge of making battery packs, fixed chargers, and individual cells for electric vehicles. Amara Raja said in December 2022 that it is constructing a 16 GWH lithium-ion cell manufacturing and battery pack assembly factory in Telangana.
The Amara Raja Group launched phase 1 of the 1.5 GWH battery pack facility in Mahabubnagar district this week, along with a groundbreaking ceremony for their Customer Qualification facility for cell production.
Gala said, “Our goal is to have a manufacturing capacity of 16 GWH cells by 2029.” He further emphasized that the company’s capacity increase would be adjusted in accordance with the outcome of the market demand.
He continued, "We have not yet decided on the course of action at that point, but we're looking at different options."
Giving indication to the company’s intention of listing, he further added that they will seek stake dilution after achieving 50% of the intended production.
Galla stated he won't be able to disclose the amount to be raised or the level of stake dilution at this time.