Shares of Grasim Industries were in red during trading hours on Tuesday, July 14 despite brokerages being bullish on India's biggest renewable energy acquisitions as its wholly owned subsidiary Aditya Birla Renewables Ltd plans to acquire Solenergi Power Pvt. Ltd. (formerly Sprng Energy) from Shell in a Rs 17,200 crore transaction.
Grasim Industries share price declined as much as 1.6% to Rs 3,093.1 apiece. The scrip was trading 1.35% lower by 10:05 am, while the benchmark Nifty 50 index was down 0.58%.
The proposed acquisition will almost double Aditya Birla Renewables' portfolio to 9.3 GW from 4.4 GW, placing it among India's largest renewable energy platforms.The portfolio includes 3.3 GW of operational assets and 1.7 GW under construction or already contracted.
Morgan Stanley retained 'Overweight' rating on Grasim Industries stock at a target price of Rs 3,900, a 25% upside, descibing the move as a positive development for both Aditya Birla Renewables and Grasim. According to the brokerage, the transaction provides immediate scale, bringing the company much closer to its 10 GW target well ahead of schedule.
It further mentioned that management is now aiming to double renewable capacity again over the next few years. It also described the Sprng Energy acquisition as a timely investment aligned with India's energy security agenda, giving the Aditya Birla Group significant exposure to the country's accelerating transition towards domestically sourced renewable power.
Citi retained its 'Buy' rating with a target price of Rs 3,600 but said investors could initially focus on the impact of the acquisition on Grasim's leverage. The brokerage expects the company to strike a balance between capital allocation and scaling up its renewable business, while also raising debt to support the transaction.
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