Tata Explores Spinoff for Agratas: Unlocking Potential in the Battery Business

Tata Group is reportedly contemplating the spinoff of its battery business, Agratas Energy Storage Solutions Pvt, as part of its strategic expansion into India’s renewable energy and electric vehicle sectors. In the initial stages of discussions, Tata aims to establish Agratas as an independent unit, facilitating potential fundraising and a subsequent public listing on the Stock Exchange. The potential valuation for Agratas upon listing is estimated to be between $5 billion to $10 billion, contingent on its growth trajectory and market sentiment.

Agratas specializes in designing and manufacturing batteries for the automotive and energy sectors, operating production facilities in both India and the UK. Its key customers include Tata Motors Ltd and Jaguar Land Rover Automotive Plc, showcasing its pivotal role in supporting Tata Group’s endeavors in electric vehicles. The proposed spinoff aligns with Tata Motors’ recent success in reclaiming its position as India’s most valuable carmaker, driven by robust performance in sports utility vehicles and electric vehicles. The company’s quarterly earnings surpassed expectations, buoyed by Jaguar Land Rover’s best profit in seven years.

As part of Agratas’ expansion plans, the company is reportedly in discussions with a consortium of banks to secure a green loan of up to $500 million. This financial infusion aims to support the development of its manufacturing facilities, reinforcing Tata Group’s commitment to sustainable practices within the battery industry.

Additionally, Tata Motors is exploring similar spinoff plans for its electric vehicle (EV) business, with considerations stemming from existing investors expressing interest in exiting. The EV business might be positioned as a separate entity in the public domain at a later stage. It’s crucial to note that these considerations are still in their preliminary stages, and Tata Group may opt against proceeding with the proposed spinoffs based on evolving circumstances and strategic evaluations. Overall, these potential spinoffs underscore Tata Group’s proactive approach to navigating the dynamic landscape of renewable energy and electric vehicles in India.