Welspun Corp Announces ₹44.25 Cr Investment Agreement For Renewable Energy Supply And DI Pipes Capacities Expansion

Welspun Corp Limited, a leading player in the steel pipe industry, is set to make significant strides in the renewable energy and ductile iron pipes sectors. The company's Board of Directors, in a recent meeting, approved strategic initiatives, the company on Thursday announced through an exchange filing.

Investment in a Special Purpose Vehicle (SPV) for Renewable Energy

As part of their ESG (Environmental, Social, and Governance) journey, Welspun Corp Limited has entered into an agreement to secure a reliable supply of renewable energy. The company is set to invest in a Special Purpose Vehicle (SPV) with Mounting Renewable Power Limited (MRPL), a subsidiary of Welspun New Energy Limited (WNEL), a related party of the company.

The Board of Directors has greenlit an investment not exceeding Rs. 44.25 Crore, which will grant Welspun Corp Limited approximately 21.54% equity share capital in MRPL. The remaining shareholding will be with WNEL and Welspun Living Limited (WLL). MRPL, as an SPV, will establish a 42 MW Renewable Energy Round-The-Clock (Re-RTC) project harnessing energy from wind and solar sources. This move is expected to reduce the cost of power and make Welspun Corp Limited's Anjar Unit approximately 55% renewable energy-powered by the financial year 2026, aligning with the company's commitment to clean and sustainable energy.

Expansion of Ductile Iron Pipes Capacities

Welspun Corp Limited is also expanding its production capacity for Ductile Iron (DI) Pipes, a crucial segment given the strong demand outlook. In response to the substantial demand-supply gap, the company will add 100 KMTPA (Kilometres Metric Tonnes Per Annum) capacity in Anjar, increasing the total DI Pipes capacity to 500 KMTPA. The expansion, set to be completed in 12 months, will require an investment of approximately Rs. 300 Crore.

The financing for this expansion will involve both debt and promoter contributions. About Rs. 210 Crore will be sourced through debt financing, while Rs. 90 Crore will be contributed by the promoters. The increased DI Pipes capacity will primarily focus on producing smaller diameter DI Pipes, aligning with government investments and expected increased demand.

Welspun Corp Limited Shares

The shares of Welspun Corp Limited on Thursday at 10:48 am IST were trading at Rs 490.40, up by 7.32 percent.

Published on: Thursday, November 09, 2023, 10:56 AM IST