Tata Group mulling spinoff of Agratas Energy

Tata Group is reportedly contemplating the spinoff of its battery business, Agratas Energy Storage Solutions Pvt, as an independent entity, according to sources familiar with the matter. This move comes as the Indian conglomerate seeks to expand its presence in the renewable energy and electric vehicle sectors. The discussions are still in the early stages, and individuals privy to the matter requested anonymity due to the confidential nature of the discussions.

Should the spinoff materialize, Agratas Energy Storage Solutions Pvt would operate as a standalone unit, enabling the battery business to raise capital and potentially go public on the Mumbai stock exchange at a later stage. Sources suggest that depending on its growth trajectory and prevailing market sentiment, Agratas could be valued between $5 billion to $10 billion. However, a spokesperson for Tata declined to provide any comments on the matter.

Agratas is primarily engaged in the design and manufacturing of batteries for both the automotive and energy sectors, with manufacturing facilities located in India and the UK. Its major clients include Tata Motors Ltd and its subsidiary Jaguar Land Rover Automotive Plc.

Tata Motors, buoyed by its strong presence in sports utility vehicles and electric vehicles (EVs), recently reclaimed its position as India’s most valuable carmaker. The company surpassed market expectations in its most recent quarterly earnings, fueled by Jaguar Land Rover's strongest profit performance in seven years.

In a related development, Agratas is reportedly in discussions with a consortium of banks to secure up to $500 million through a green loan to facilitate the expansion and development of its manufacturing facilities.

Furthermore, Tata Motors is exploring similar spinoff plans for its EV business, considering the potential exit of some existing investors. The EV division could eventually become a separate publicly traded entity.

It's important to note that these considerations are still in the preliminary stages, and Tata Group may opt against proceeding with the spinoffs depending on various factors.