Aditya Birla Group is in advanced talks to secure ₹14,000 crore in long-term loans from domestic banks to fund its ₹17,200 crore acquisition of Sprng Energy. The financing aims to support the purchase of the renewable energy platform from Shell. This deal will significantly expand the group's green energy capacity, but investors may monitor the impact of the added debt on the group's balance sheet.
The Aditya Birla Group is working to finalize a significant debt arrangement to support its major acquisition in the renewable energy sector. The group is in advanced discussions with domestic financial institutions to raise approximately ₹14,000 crore in long-term loans. This funding is specifically earmarked for the acquisition of Sprng Energy, a renewable platform previously owned by Shell, which has an enterprise value of ₹17,200 crore.
Funding Strategy and Bank Participation
To finance this transaction, the group is moving toward domestic syndication, which involves a group of lenders rather than relying solely on international bridge financing. Axis Bank has reportedly underwritten the entire facility and is expected to retain a large portion, around ₹5,000 crore. Other major lenders, including the State Bank of India and HDFC Bank, are currently evaluating their participation.
The structure of this loan is designed for the long term, with a potential tenure of up to 20 years. The group is targeting an interest rate of approximately 7.7%, which is competitive in the current financing market. By securing long-tenor debt within India, the group aims to optimize its borrowing costs and create a more stable financial structure for these newly acquired assets.
Expanding Renewable Footprint
The acquisition is a significant step for the group’s renewable energy arm, Aditya Birla Renewables. It is expected to add about 5 GWp of capacity to its portfolio, which includes 3.3 GWp of operational assets and 1.7 GWp of projects that are currently under construction. Once integrated, this addition will boost the group’s total renewable energy capacity to approximately 9.3 GWp, positioning it as a larger player in the Indian clean energy market. The equity portion of the deal is being supported by resources from Grasim Industries and funds managed by Global Infrastructure Partners.
Risks and Investor Monitorables
While the expansion is significant, there are factors that investors may track as the acquisition moves toward its target completion date of December 31, 2026. The most immediate is the increased debt burden. Taking on ₹14,000 crore in new debt requires the company to manage higher interest obligations, which could influence near-term profitability if not carefully balanced.
Additionally, there is the task of integrating a utility-scale renewable business into the group’s existing operations, which often focus on captive power for commercial and industrial users. Execution risk—the challenge of ensuring smooth operations and maintaining project returns—will be important. Finally, the deal is still subject to standard regulatory approvals, including clearances from the Competition Commission of India and the Central Transmission Utility, which are standard procedures for a transaction of this scale. The key monitorable for stakeholders will be the successful closure of this funding and the subsequent integration of assets into the group’s broader infrastructure portfolio.