Synopsis: Amara Raja shares soared 20% to Rs1,656 after signing a licensing agreement with GIB EnergyX for LFP technology, enhancing their manufacturing and R&D capabilities in lithium battery technology.
Amara Raja's shares soared by 20%, reaching a new peak of Rs1,656, following the announcement of a technical licensing agreement with GIB EnergyX for lithium iron phosphate (LFP) technology. This deal is set to bolster Amara Raja's manufacturing capabilities and enhance its research and development in lithium battery technology.
Remarkable Stock Performance
In June, Amara Raja's shares jumped by 40%, contributing to an impressive year-to-date (YTD) return of 103%. This represents the best annual performance for the stock since 2014. From its 2022 low of Rs438, the stock has surged by 278%, trading significantly higher now.
Licensing Agreement Details
Amara Raja, one of India's leading battery manufacturers, announced that its wholly-owned subsidiary, Amara Raja Advanced Cell Technologies (ARACT), signed a technical licensing agreement with GIB EnergyX Slovakia, a subsidiary of Gotion High-Tech Co. Ltd. This agreement allows ARACT to manufacture LFP cells in both cylindrical and prismatic formats.
The scope of the licensing deal includes:
Access to cell technology intellectual property (IP)
Support in establishing Gigafactory facilities with the latest process technologies
Integration with Gotion’s global supply chain for critical battery materials
Customer technical support for solution deployment
This technology transfer will support Amara Raja's efforts to operationalize its gigafactory manufacturing capacities and advance its 'e+ Energy Labs' research center, which aims to lead India's R&D capabilities in this field.
Strategic Partnerships and Investments
Amara Raja and Gotion are both shareholders and board members of InoBat, a Slovakian lithium battery technology company focusing on advanced applications such as electric aviation and a sustainable battery value chain. Last year, Amara Raja announced a Rs9,500 crore investment to establish the Amara Raja Giga Corridor in Telangana.
Vikramadithya Gourineni, Executive Director at ARE&M, expressed excitement over the partnership with Gotion and InoBat, highlighting the strategic decision to invest in the evolving lithium battery ecosystem. The collaboration through GIB's ‘Global C2C Alliance’ is expected to reinforce technology and supply security, accelerating the establishment of the Amara Raja Giga Corridor.
Recent Financial Moves
On June 20, Amara Raja further invested EUR 20 million, increasing its equity stake in InoBat AS, Norway, to around 9.32%, including a previous investment of EUR 10 million.
Disclaimer: The views and recommendations in this article are those of individual analysts. Investors are advised to consult certified experts before making any investment decisions.
