Amara Raja shares hit 20% upper circuit after subsidiary signs licensing deal with GIB

Amara Raja's shares surged 20% to a new high of 1,656 after signing a technical licensing agreement with GIB EnergyX for LFP technology. The agreement aims to enhance manufacturing capabilities and strengthen R&D in lithium battery technology.

A Ksheerasagar
First Published25 Jun 2024, 10:08 AM IST
Multibagger stock: In June, the shares surged by 40%, bringing the year-to-date (YTD) return to an impressive 103%. This marked the best annual performance for the stock since 2014. From its 2022 low of  <span class='webrupee'>₹</span>438, the stock has gained 278% and is currently trading at significantly higher levels.
Multibagger stock: In June, the shares surged by 40%, bringing the year-to-date (YTD) return to an impressive 103%. This marked the best annual performance for the stock since 2014. From its 2022 low of ₹438, the stock has gained 278% and is currently trading at significantly higher levels.(Sanjeev Verma/HT)

Shares of Amara Raja, one of India’s leading battery manufacturers, jumped 20% to touch a new lifetime high of 1,656 apiece in today's early morning trade after the company, in an exchange filing on Monday, said that its wholly owned subsidiary, Amara Raja Advanced Cell Technologies (ARACT), has signed a technical licensing agreement with GIB EnergyX Slovakia, a subsidiary of Gotion High-Tech Co. Ltd.

As part of the agreement, GIB EnergyX will license Gotion’s world-class LFP technology for lithium-ion cells to ARACT. This comprehensive agreement enables Amara Raja to manufacture world-class LFP cells in both cylindrical and prismatic form factors.

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

The technology transfer and service support will fully complement Amara Raja’s efforts to operationalize its gigafactory manufacturing capacities and its advanced research and innovation center, ‘e+ Energy Labs’, that aims to lead India’s R&D capabilities in this field, according to the company's exchange filing.

Amara Raja and Gotion are both shareholders and board members of InoBat, an emerging lithium battery technology company in Slovakia, tackling advanced applications such as electric aviation and developing a robust ‘Cradle to Cradle' ecosystem of battery value chain.

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Last year, Amara Raja announced an investment outlay of 9,500 crore to establish the Amara Raja Giga Corridor in the state of Telangana. The company aims to keep their products competitive and contemporary through access to continuous improvements in cell performance and process efficiencies during the partnership period.

Vikramadithya Gourineni, Executive Director, ARE&M, added, “We are very excited to announce our deepening partnership with Gotion and InoBat. We have invested a lot of time and effort over the past few years to understand the global new energy landscape and made a calculated decision to be a part of the evolving lithium battery ecosystem through our investment in InoBat."

"Further collaborating with GIB through their ‘Global C2C Alliance’ brings us great confidence in reinforcing our technology and supply security. We are sure that this partnership will help us accelerate our efforts in establishing the Amara Raja Giga Corridor, while Gotion's acumen lends significant customer credibility to our venture.”

On June 20, the company said it has further invested EUR 20 million, which includes a subscription for an additional 4.5% equity stake in InoBat AS, Norway. The total holding will be around 9.32% of its equity stake in InoBat AS, including its previous investment of EUR 10 million.

 

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The company's shares saw significant gains after June 4, following the victory of the Telugu Desam Party (TDP) in the AP assembly elections. Jayadev Galla, the Managing Director of Amara Raja and a former MP from the TDP, and his party's success positioned it as an influential player in forming the national government.

In June, the shares surged by 40%, bringing the year-to-date (YTD) return to an impressive 103%. This marked the best annual performance for the stock since 2014. From its 2022 low of 438, the stock has gained 278% and is currently trading at significantly higher levels.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

 

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₹295 Cr

$23 B

$65 M

3.36%

$65.47 B

$2.5 M

₹80 Cr

1.4%

₹773 Cr

₹2,705 Cr

₹1 Cr

₹14,370 Cr

₹5.74 T

First Published:25 Jun 2024, 10:08 AM IST
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