Nitin Spinners Boosts Renewable Power Capacity with ₹95 Crore Acquisition

Nitin Spinners Ltd.'s revenue was ₹800.68 crore in Q3 FY26, while its Profit After Tax (PAT) stood at ₹44.41 crore.

Reader Takeaway: 10 MW renewable capacity secured; new entity's nil turnover poses early risk.

What Just Happened

Nitin Spinners Ltd. has given the green light to acquire a 6.66% stake in CGE II Hybrid Energy Private Limited for ₹95.20 crore. This strategic move is set to boost the company's renewable power supply by 10 MW for its own use. The deal is targeted for completion by September 30, 2026, pending standard closing conditions. CGE II Hybrid Energy Private Limited, established in December 2021, operates in renewable power generation and distribution within Rajasthan.

Why This Matters

This acquisition aligns with Nitin Spinners' strategy to secure cleaner and potentially more cost-effective energy for its operations. Increasing reliance on renewable power reduces dependence on grid electricity, which can be subject to price volatility and supply issues. It also strengthens the company's environmental, social, and governance (ESG) profile, a key consideration for investors and stakeholders in the textile industry.

The Backstory

Nitin Spinners has a history of investing in renewable energy, having installed 18.8 MW of rooftop solar capacity across its units with more under implementation. This latest move follows a prior acquisition of a stake in Continuum Green Energy for ₹17.1 crore to secure 18 MW of wind-solar hybrid power. Across the Indian textile sector, renewable energy adoption is rising, with the yarn and fabric segment seeing its renewable energy share grow from 3% to 8% between FY2023 and FY2025.

What Changes Now

• The company will add 10 MW of renewable power capacity to its energy mix.
• Potential for reduced energy costs and improved operational margins.
• Enhanced ESG credentials and contribution to sustainability goals.
• Greater energy security and reduced reliance on conventional power sources.

Risks to Watch

The acquisition must still meet customary conditions, with a completion deadline of September 30, 2026. This timeline allows for potential delays. The target company, CGE II Hybrid Energy Private Limited, is a new venture, founded in late 2021, and has reported no turnover for the last three fiscal years. Separately, Nitin Spinners has previously dealt with an insider trading violation involving a vice president, underscoring the need for strict adherence to SEBI regulations.

Peer Comparison

Leading textile players like Arvind Ltd. are also significantly increasing their renewable energy share, with Arvind using renewables for about 43% of its energy and aiming for 90% soon. This reflects a sector-wide trend, with other peers such as Welspun Living, KPR Mill, and Page Industries also enhancing their renewable energy footprint.

Context Metrics

• Nitin Spinners' renewable energy consumption increased to 107,482 GJ in FY2025 from 65,353 GJ in FY2024.

What to Track Next

• Monitor the timely completion of the acquisition by the September 30, 2026 deadline.
• Assess the integration of the 10 MW renewable power into Nitin Spinners' operations.
• Observe any further announcements regarding energy cost savings or sustainability improvements.
• Track the development and operational performance of CGE II Hybrid Energy Private Limited post-acquisition.
• Keep an eye on regulatory compliance and broader ESG performance.