Jubilant Pharmova’s Subsidiary Announced Strategic Acquisition to Secure Renewable Power

Jubilant Pharmova Limited has announced that its subsidiary, Jubilant Biosys Limited, has approved an investment proposal. On May 28, 2024, Jubilant Biosys decided to invest in Isharays Energy Two Private Limited, a subsidiary of SunSource Energy Private Limited. This investment involves acquiring up to a 14.75% stake in Isharays Energy and includes agreements for power supply and shareholding.

This investment aims to secure renewable energy for Jubilant Biosys’ facilities in Noida and Greater Noida. This move is part of the company’s broader strategy to reduce costs and carbon footprint using renewable energy. Earlier this year, the company made a similar investment to obtain renewable energy for its facilities in Karnataka.

Industry

The Isharays Energy operates in the renewable energy sector, explicitly generating electricity through solar energy.

Purpose and Effects of Acquisition

The acquisition aims to secure access to renewable power, up to 5.89 MW, through a captive power arrangement. This initiative is intended to fulfil the green energy needs of the company’s facilities in Noida and Greater Noida while optimising energy costs. It aligns with the Electricity Rules, 2005, regarding captive power requirements.

Timeline for Completion

The acquisition is expected to be completed by approximately October 31, 2024, around five months from the agreement signing date.

Cost of Acquisition

The total consideration for acquiring 30,94,000 equity shares of Isharays Energy will be approximately ₹3.094 crore. The equity shares will be acquired or subscribed to at a face value of ₹10 each.

Percentage of Shareholding/Control Acquired

Isharays Energy will enter into agreements with four to five other off-takers, who will collectively acquire at least an 11.25% stake to meet their renewable power needs under the same captive arrangement. All off-takers will hold 26% of Isharays Energy’s share capital. SunSource Energy Private Limited will subscribe to 74% of Isharays Energy’s share capital.

Recently, On January 24, the company acquired a 19.89% stake in O2 Renewable Energy XVI Private Ltd, comprising 75,903 Compulsorily Convertible Debentures (CCDs) valued at ₹1,000 each, along with 8,43,362 equity shares with a face value of ₹110 each. In March, the company increased its holdings by acquiring 7,16,857 equity shares and 64,517 CCDs.

About Jubilant Pharmova Ltd

Jubilant Pharmova Ltd is a global pharmaceutical company with three primary business segments: pharmaceuticals, contract research and development services, and proprietary novel drugs.

Disclaimer

This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.