Tata Group Mulls Spinoff Of Battery Business Agratas Energy Solutions: Report

The valuation of Agratas upon listing could range between $5 billion and $10 billion, contingent upon its growth trajectory and prevailing market sentiment

Agratas specialises in the design and production of batteries for the automotive and energy sectors, boasting manufacturing facilities in India and the UK.

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In a move signaling Tata Group's expansion into India's renewable energy and electric vehicle sectors, sources familiar with the matter told news agency Bloomberg that the conglomerate is contemplating a potential spinoff of its battery business. At the nascent stage of discussions, Tata is considering the prospect of establishing Agratas Energy Storage Solutions Pvt as an independent entity, the sources, who preferred anonymity due to the confidentiality of the matter, revealed. This strategic restructuring could facilitate Agratas' ability to raise capital and eventually pursue a public listing in Mumbai.

According to the news agency, sources indicated that the valuation of Agratas upon listing could range between $5 billion and $10 billion, contingent upon its growth trajectory and prevailing market sentiment. When approached for comment, a representative for Tata declined to provide any official statement to Bloomberg.

Agratas, as per its website, specialises in the design and production of batteries for the automotive and energy sectors, boasting manufacturing facilities in India and the UK. Notably, Tata Motors Ltd and its subsidiary Jaguar Land Rover Automotive Plc are key clients of Agratas.

Tata Motors recently reclaimed its title as India's most valuable carmaker, buoyed by its robust presence in sports utility vehicles and electric vehicles (EVs). The company's latest quarterly earnings surpassed expectations, bolstered by JLR's strongest profit performance in seven years.

Reports surfaced in January that Agratas is in discussions with a consortium of banks to secure up to $500 million through a green loan, earmarked for the development of its manufacturing infrastructure.

Furthermore, Tata Motors is reportedly exploring similar spinoff strategies for its EV business, with indications suggesting that some existing investors may seek an exit. The potential spinoff of the EV division could culminate in its independent public listing at a later stage, according to one of the sources. However, it's important to note that these deliberations are in preliminary stages, and Tata Group reserves the right to reconsider or discontinue the proposed spinoffs, as outlined by the sources.