Exide shares up 2% after ₹100-cr infusion in Exide Energy for li-ion battery plant

Shares of Exide Industries are in focus today following the company’s announcement of a ₹100-crore all-cash investment in its subsidiary, Exide Energy Solutions (EESL). The funds will accelerate the construction of a greenfield facility in Bengaluru for manufacturing and selling lithium-ion battery cells, modules, and packs. Exide shares reached a morning high of ₹520.55 on the NSE today, up 2% from yesterday's close of ₹512.15. The shares opened at ₹516.20 and are currently trading at ₹518.40.

EESL is focused on producing advanced lithium-ion battery cells in cylindrical, pouch, and prismatic formats, along with assembling and selling battery modules and packs. With the latest infusion, Exide's total investment in EESL stands at ₹2,852.24 crore, including ₹200 crore in the first quarter and ₹75 crore in August.

The Bengaluru project, a 12 GWh greenfield facility being built in two phases of 6 GWh each, is progressing as planned. The facility will cater not only to the EV market but also to the growing demand for stationary energy storage solutions, driven by India's increasing renewable energy adoption. Customer onboarding is already underway across both mobility and stationary segments.

EESL gained attention in April when Hyundai Motor Company and Kia Corporation signed an agreement with the company to localise EV battery production in India.

Exide Industries merged its wholly owned subsidiary, Exide Energy Private (EEPL), with Exide Energy Solutions (EESL) in March 2024, following approval from the National Company Law Tribunal (NCLT) in Kolkata. As part of the merger, Exide Industries received 13.48 crore fresh equity shares of EESL, consolidating its lithium battery operations under a single entity.

EEPL operates a 1.5 GW fully automated lithium-ion battery pack and module plant in Prantij, Gujarat, while EESL manages the lithium cell manufacturing business. EESL caters to India's electric vehicle and stationary applications markets. As of March 31, 2024, EESL has a paid-up equity share capital of ₹995.88 crore, a net worth of ₹1,981.56 crore, and a turnover of ₹239.14 crore. However, the company posted a loss of ₹149.45 crore for FY24.

Exide Industries, traditionally dominant in the lead-acid battery market, is now shifting its focus to lithium-ion technology as part of its broader energy solutions strategy. In July, the company reported a standalone profit after tax of ₹280 crore for the first quarter of this fiscal year, a 15.7% increase from ₹242 crore in the same quarter last year, while maintaining a debt-free balance sheet. Exide's stock has surged 61% year-to-date and 98% over the past 12 months.

According to S&P Global Mobility's AutoTechInsight, India's demand for EV lithium batteries is expected to rise sharply from 4 GWh in 2023 to nearly 139 GWh by 2035, with the bulk of this demand driven by the light vehicle segment. Tata Motors, with its robust EV portfolio, remains the top consumer of EV battery cells in the country.

India's EV supply chain is still fragmented, particularly in battery manufacturing, which involves assembling cells into modules and modules into packs. While local production is in its early stages, India has historically relied on imports from Greater China, South Korea, and Japan. By 2030, only 13% of India's EV battery cell demand is expected to be met domestically, with the rest continuing to be imported.

In 2024, Ola Electric began mass production of its NMV21700 cylindrical cell battery at its Chennai Gigafactory for two-wheelers. Other key players, including Rajesh Exports, Amara Raja, Reliance, and Adani, are also planning lithium-ion battery cell factories to boost domestic EV battery production. EV battery outsourcing, as a result, is projected to drop from 76% in 2022 to below 52% by 2035.