UltraTech Cement, through its subsidiary, has announced the acquisition of a 13.99% equity share capital in FPEL SERVICES PRIVATE LIMITED. This strategic move aims to secure green energy for the company’s operations, optimize energy costs, and comply with regulatory requirements. The India Cements Limited, a subsidiary, will also acquire a 12.48% stake in the same renewable energy firm. The total investment highlights UltraTech’s commitment to sustainable energy solutions and captive power consumption.
Strategic Green Energy Acquisition
UltraTech Cement Limited has entered into significant agreements, including an Energy Supply Agreement and a Share Subscription and Shareholders Agreement, to acquire 13.99% equity share capital in FPEL SERVICES PRIVATE LIMITED. This company is actively involved in the generation and transmission of renewable energy. The acquisition is primarily driven by the company’s objective to meet its green energy demands, optimize energy costs, and adhere to regulatory mandates for captive power consumption under electricity laws.
Subsidiary’s Parallel Investment
In a concurrent development, The India Cements Limited, a subsidiary of UltraTech Cement, has also finalized similar agreements to acquire 12.48% equity shares in FPEL SERVICES PRIVATE LIMITED. This dual investment underscores a focused strategy towards enhancing the company’s renewable energy portfolio.
Deal Rationale and Target Entity
The target entity, FPEL SERVICES PRIVATE LIMITED, is engaged in the generation and transmission of renewable energy, specifically wind power. The primary reasons for this acquisition include meeting UltraTech’s green energy needs and optimizing operational costs. The company’s business falls within the renewable energy sector, a key area for sustainable industrial operations. The acquisition is classified as a cash consideration, with UltraTech Cement investing Rs. 12,08,90,000/- and The India Cements Limited investing Rs. 10,78,00,000/-. The proposed transaction is not a related party transaction, and no interest has been declared by promoters or group companies.
Operational Details and Timeline
FPEL SERVICES PRIVATE LIMITED, incorporated on 14th December 2022, operates as a special purpose vehicle. It will supply 15.70 MW AC wind power to UltraTech’s plants in Tamil Nadu from a project located in Karur village. The turnover for the last three years for FPEL Services is reported as Nil. The acquisition is expected to be completed within 180 days from the execution of the agreements.
Regulatory Compliance
The disclosure, as required under the Listing Regulations, has been attached, providing detailed information about the transaction. The agreements are structured to ensure compliance with all applicable legal and regulatory frameworks related to energy supply and shareholding.
Market Information
UltraTech Cement Limited’s shares are listed on the BSE under Scrip Code: 532538 and on the NSE under Scrip Code: ULTRACEMCO. The company has also provided listings on the Luxembourg Stock Exchange and the Singapore Exchange with relevant scrip codes and ISIN codes.
Source: BSE
