The company is looking to apply for the government’s new production-linked incentive (PLI) scheme for advanced chemistry cells to break into the electric vehicle (EV) battery market.
While the exact quantum of investment has not yet been approved by the company’s board, the direction of expansion has been confirmed and the company’s management estimates that these expansions would entail an investment of about $2 billion.
The maker of Amaron branded batteries will also be shuffling its leadership as founder and long-serving chairman Ramachandra Galla would not not seek reappointment at the company’s annual general meeting in August.
His son and managing director of the company, Jayadev Galla, will take over the role of Chairman as well as chief executive officer (CEO). The incumbent CEO Vijayanand Samudrala will take charge as the president of New Energy business.
Meanwhile, the next generation of the promoter family will join the board. Harshavardhana Gourineni and Vikramadithya Gourineni, grandsons of Ramachandra Galla, will join as executive directors and look after the lead-acid batteries and the new energy businesses, respectively.
For the advanced battery plant in India under the PLI scheme, the company is scouting global partners for technology support.
“In normal course, we might still be nervous to move ahead with (an advanced chemistry cell manufacturing plant) at this time, but the PLI scheme has given us the confidence,” Jayadev Galla, now vice-chairman, told ET.
The company has looked at land parcels in multiple states and is negotiating with state governments for special concessions. This will be the group’s first facility outside Andhra Pradesh.
In the lead-acid battery business, with the Indian market split between leaders Amara Raja and Exide Industries, the company is looking at acquisition opportunities overseas for further growth. Presently, exports account for about 12-15% of the company’s revenues.
Galla said that the company’s board was confident about the continued relevance of lead-acid batteries.
“As long as internal combustion engine vehicles are on the roads, there will be a need for lead-acid batteries,” he told ET. “If we weren’t confident about the lead-acid business, it would’ve been easy for us to sell and get out of this business because there are suitors interested in buying us out.”