August 16, 2018: Two new initiatives from Amara Raja Batteries were announced this month. In an regulatory filing on August 11, the firm said that it had approved setting up a green field automotive battery plant with a capacity of 6.5 million units per year.
At the end of July the firm set up Amara Raja Batteries Middle East a wholly owned subsidiary at Sharjah Airport International Free Zone in the United Arab Emirates. In its regulatory filing said it had an authorised share capital of AED150,000 ($41,000).
The expansion at home and internationally reflects a growing optimism about the state of the Indian economy. The IMF predicted in that May that India will be the fastest growing major economy in 2018 with a growth rate of 7.4%. Next year it is forecasting 7.8%.
Jayadev Galla, managing director at Amara said: “The economy is poised to grow and provide opportunities for increasing production and consumption. In line with the growth and demand expectations, we are expanding capacities and adapting new technologies well in time.”
The firm has set aside Rs7 billion ($99 million) for the domestic project. This is in addition to the Rs5 billion already planned for development the year. The domestic project, likely to be built in the state of Andhra Pradesh — where Amara Raja is headquartered — will be developed in three phases. The first phase should be completed by early 2020.
The regulatory file for the Sharjah subsidiary said it would enable the firm to “tap the growing West Asian market”.
Separately, the Indian business press says Amara Raja Group, is consolidating the group holdings across the various companies under a newly formed holding entity, RN Galla Family Pvt Ltd.
A corporate structure for the holding entity, which so far was a partnership firm, is being created by demerger of Amara Raja Electronics, to which group’s shareholding of listed entity Amara Raja Batteries has been transferred.
Amara Raja Electronics Pvt Ltd, a promoter-held company that manufactures products like digital inverters, battery charger and converters is being demerged to carve out two resulting companies, RN Galla Family Pvt Ltd, the group holding company, and Amara Raja Power Systems.