NEW DELHI: India’s richest billionaire Mukesh Ambani’s Reliance Industries Ltd (RIL) gave a major push to the its ambitious solar business by acquiring two major firms on Sunday. RIL’s acquisition of Norway-based REC Solar Holdings is likely to give the company a major cost advantage when it comes to solar equipment manufacturing.
Analysts at Jefferies India said in a report that REC is the only company globally that has commercialised tech, which consumes 75% less power than Chinese competitors. “REC has implemented the fluidised bed reactor (FBR) tech for producing polysilicon on a commercial scale. The FBR process consumes 75-80% less energy than the traditional Siemens process that Chinese players use,” said the report.
REC has patented technology and opens up the export market for Reliance’s solar business. “REC’s long operating history in Europe and the US opens up the possibility of RIL exporting to these geographies,” Jefferies said. The brokerage has maintained its ‘buy’ rating on the stock with a target price of Rs 3,050. Shares of RIL rose 1.8% on Monday but closed slightly lower at Rs 2,651.
Reliance New Energy Solar, a wholly owned subsidiary of RIL, acquired REC Group for $771 million. The company also announced plans to buy a 40% stake in Shapoorji Pallonji-backed Sterling and Wilson Solar Ltd (SWSL) for Rs 2,845 crore. “In India, Reliance plans to use this industry leading technology (of REC Solar Holding) in their fully integrated, metallic silicon to PV panel manufacturing giga factory at Dhirubhai Ambani Green Energy Giga Complex, Jamnagar, initially starting with 4GW per annum capacity and eventually growing to 10GW per annum,” said RIL Chairman & MD Mukesh Ambani.