Exide Industries Drives Towards Sustainability with Acquisition in Solar Power

Exide Industries Limited, a leading name in the automotive battery industry in India, has taken a significant step towards a greener future. On April 9, 2024, they announced the acquisition of a 26% equity stake in Clean Max Arcadia Private Limited, a Special Purpose Vehicle (SPV) promoted by Clean Max Enviro Energy Solutions Pvt Ltd. This strategic move underscores Exide’s commitment to sustainability and optimising its energy consumption.

Objective of Acquisition

The acquisition of a stake in Clean Max Arcadia is driven by Exide’s desire to become a captive consumer of renewable energy. Regulations for captive power projects in India mandate that companies subscribe to at least 26% of the target company’s equity capital to qualify. By acquiring this stake, Exide positions itself to leverage Clean Max Arcadia’s solar power generation capacity, significantly reducing its dependence on conventional energy sources. This shift towards renewable energy aligns with growing environmental concerns and positions Exide as a company committed to sustainable practices.

Optimising Factory Operations

The strategic partnership with Clean Max Arcadia extends beyond simply meeting captive power project requirements. The acquired stake is specifically linked to the company’s factory located in Bawal, Haryana. By directly sourcing solar power from Clean Max Arcadia, Exide anticipates optimising the overall electricity cost for their manufacturing operations. This translates to potential cost savings and improved operational efficiency for the company.

Investment Details and Timeline

The acquisition will be executed through a cash consideration of ₹5,34,59,929, which will be invested in Clean Max Enviro Energy Solutions Pvt Ltd. The entire acquisition process is expected to be finalised by April 30, 2024. Upon completion, Exide Industries will hold a 26% ownership stake in Clean Max Arcadia, solidifying its strategic partnership in the renewable energy sector.

About Clean Max Arcadia Private Limited

Clean Max Arcadia Private Limited was incorporated for a special purpose by Clean Max Enviro Energy Solutions Pvt Ltd. The company plans to set up a renewable energy-based captive generating plant with a solar capacity of 14.85 MWp / 9.9 MW in Haryana.

About Exide Industries Ltd

Exide Industries Ltd. is mainly involved in the manufacturing of storage batteries and allied products in India. It produces batteries for the automotive sector, including two-wheelers, four-wheelers, three-wheelers, E-rickshaws, and H-UPS.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.