Amara Raja shares rally 20% on new LFP cell production tie-up

Shares of battery maker Amara Raja Energy and Mobility Ltd jumped as much as 20% in the intraday trading on Tuesday to hit a new lifetime high. The stock soared after the company announced an agreement with Gotion-InoBat-Batteries (GIB) to manufacture lithium iron phosphate (LFP) cells.

The shares, which closed at Rs 1,380.05 on Monday, rallied to a record high of Rs 1,656.05 on Tuesday morning on the National Stock Exchange. The shares closed at Rs 1,650 today, up 19.6% from the previous close.

Autocar Professional had earlier this month reported that the company was in advanced stages of discussions with various players for a comprehensive cell partnership, looking at technology, manufacturing know-how, and supply chain.

On Monday evening, the company announced that its wholly-owned subsidiary Amara Raja Advanced Cell Technologies has signed an agreement with Gotion High-Tech’s subsidiary GIB EnergyX Slovakia to license Gotion’s LFP technology for manufacturing lithium-ion cells in both cylindrical and prismatic form factors.

Amara Raja is setting up a giga factory for manufacturing lithium-ion cells and battery packs in Telangana that will have a capacity of 16 GWh cell capacity and 5 GWh battery pack capacity over the next 10 years. The company plans to start commercial operations of the first phase of the factory with a capacity of 2 GWh by the end of FY26.

“The scope of licensing provides access to cell technology IP, support in establishing Gigafactory facilities conforming to latest generation process technologies, integration with Gotion’s global supply chain network for critical battery materials, and customer technical support for solution deployment,” the company said in its announcement.

Last week, Amara Raja said it invested 20 million euros (Rs 175 crore) in Norway’s lithium battery technology company InoBat to increase its stake by 4.5% to 9.3%. Gotion is also a shareholder and board member of InoBat, and GIB is a joint venture between Gotion and InoBat.

Amara Raja also has a tie-up with a Chinese company and has jointly developed a Nickel Manganese Cobalt (NMC)--based 2170 cylindrical cell. The giga factory will initially start commercial production with NMC cells, which will be mainly for the two-wheeler market.

Amara Raja's major competitor Exide Industries has a partnership with China-based SVOLT Energy Technology Co Ltd, which develops and manufactures lithium-ion batteries and storage solutions for multiple applications. Exide has secured the rights to use and commercialize SVOLT’s technology and know-how for lithium-ion cell manufacturing.

On the capital expenditure front, Amara Raja is planning to invest close to Rs 3,000 crore for its new energy and lead-acid businesses in two years – FY25 and FY26 – as it looks to participate aggressively in India’s growing electric vehicle space. The total investment outlay for the Giga factor is Rs 9,500 crore. 

Also Read: Exide in talks with e2-wheeler makers for lithium-ion battery supply

Also Read: Exide to invest Rs 1,000 crore for lithium-ion cell manufacturing in FY25