India Cements signs agreements to buy a 3.62% stake in Zenataris Renewable Energy for up to ₹20.9 crore

The India Cements Limited has told the exchanges that it has entered into an Energy Supply Agreement and a Share Subscription and Shareholders Agreement to acquire 3.62% of the equity shares of Zenataris Renewable Energy Private Limited, a company engaged in generating and transmitting renewable energy. The equity investment is up to ₹20.90 crore, in cash.

The company gives the purpose as meeting its green energy needs, optimising energy cost and complying with the regulatory requirements for captive power consumption under electricity laws. The filing describes Zenataris as a special purpose vehicle set up to supply 11 MW of renewable energy to the company's cement plants.

Inference

For shareholders, the filing shows the company taking a small stake in a renewable power supplier so that it can meet its power needs under the captive consumption rules. The investment of up to ₹20.90 crore is small, and the stake of 3.62% gives limited ownership.

The filing does not give the savings expected on power costs. Investors may want to look at later results for any change in power and fuel costs, which are a significant part of a cement company's expenses.