Renewable Energy Investment
IMFA enters renewable power agreement to secure 65 MW hybrid energy supply through captive structure
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BSE
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Indian Metals & Ferro Alloys Limited (IMFA) has entered into a Power Purchase Agreement (PPA) with EG URJA STROT Private Limited to secure hybrid renewable energy supply of approximately 65 MW under a captive consumption structure. The transaction includes IMFA acquiring a 26% equity stake in the renewable energy company for ₹110.18 crore.
PRICE-SENSITIVE TRIGGER
Event: Execution of Power Purchase Agreement and acquisition of equity stake in renewable energy company.
Type: Renewable Energy Investment
Impact: Positive
Immediate Effect: The agreement strengthens IMFA’s renewable energy sourcing capabilities and supports long-term power cost optimization through captive green energy supply.
Key Metrics:
- Hybrid Renewable Power Capacity: Approximately 65 MW
- Solar Capacity: 81.4 MW
- Wind Capacity: 102.6 MW
- Battery Energy Storage System (BESS): 25 MWh
- Equity Stake Acquired: 26%
- Acquisition Cost: ₹110.18 crore
- Power Purchase Agreement Duration: 29 years
- Expected Completion Timeline: June 2027
Highlight:
- Label: Renewable Energy Supply Secured
- Value: IMFA will receive approximately 65 MW of hybrid renewable energy under a long-term captive structure arrangement.
What Happened ?
Indian Metals & Ferro Alloys Limited (IMFA) announced that it has entered into a Power Purchase Agreement (PPA) with EG URJA STROT Private Limited for supply of hybrid renewable power under the captive consumer structure defined under the Electricity Act, 2003.
The renewable energy arrangement includes solar, wind, and battery energy storage system (BESS) infrastructure designed to provide approximately 65 MW of renewable power supply to IMFA.
As part of the transaction, IMFA will subscribe to a 26% equity stake in EG URJA STROT Private Limited through one or more tranches with a total investment of ₹110.18 crore.
Key Details
Renewable Energy Partnership & Strategic Impact:
- The PPA has been signed for a tenure of 29 years.
- The renewable energy project combines:
- 81.4 MW solar capacity
- 102.6 MW wind capacity
- 25 MWh battery energy storage system (BESS)
- The arrangement is structured under captive consumer regulations under the Electricity Act, 2003 and Electricity Rules, 2005.
- EG URJA STROT Private Limited was incorporated on March 6, 2025.
- The acquired entity operates in the renewable energy sector and currently has no historical financial track record.
- IMFA will acquire a 26% equity stake through cash consideration.
- The transaction is not classified as a related party transaction.
- Management stated that the transaction will enable IMFA to secure approximately 65 MW renewable power supply for operations.
- Completion of the acquisition and project execution is expected by June 2027.
Note:
- The investment aligns with the company’s long-term strategy of integrating renewable power into its energy-intensive ferro alloys operations to improve sustainability and reduce long-term energy costs.
Risk Analysis
Summary:
- The project remains exposed to renewable project execution risks, commissioning delays, regulatory changes, and variability in renewable energy generation efficiency.
Key Risks:
- Renewable power generation remains dependent on solar and wind resource availability.
- Delay in project commissioning may postpone expected energy cost benefits.
- Battery energy storage economics and operational efficiency remain evolving segments.
- The renewable energy entity is newly incorporated and does not yet have an operational financial track record.
- Regulatory or policy changes in captive power and renewable energy frameworks may affect economics.
- Large upfront capital investment may impact near-term cash deployment.
Worst Case Scenario:
- Delays in commissioning or underperformance of renewable infrastructure could reduce expected power supply benefits and delay return on investment.
Risk Level: Medium
Company Commentary
- IMFA stated that the acquisition and PPA arrangement will enable the company to secure approximately 65 MW renewable power supply.
- The company confirmed that the transaction is being undertaken through a captive consumption structure under applicable electricity regulations.
- Management highlighted that the investment will be completed through cash consideration in one or more tranches.
- The company indicated that no regulatory approvals are currently applicable for the acquisition.
Official Exchange Filing: Indian Metals & Ferro Alloys Limited