NEW DELHI: Reliance Industries Ltd (RIL) of India’s richest billionaire Mukesh Ambani gave a major boost to his ambitious solar company by acquiring two large companies on Sunday. RIL’s acquisition of the Norwegian company REC Solar Holdings is likely to give the company a major cost advantage in manufacturing solar equipment.
Analysts from Jefferies India said in a report that REC is the only company in the world to bring technology to market, which uses 75% less energy than its Chinese competitors. “REC has implemented Fluidized Bed Reactor (RBF) technology to produce polysilicon on a commercial scale. The RBF process consumes 75 to 80% less energy than the traditional Siemens process used by Chinese players, ”the report states.
REC owns patented technology and opens the export market for Reliance’s solar business. “REC’s long history of operating in Europe and the United States opens up the possibility of exporting RIL to these geographies,” Jefferies said. The brokerage firm maintained its buy rating on the stock with a target price of Rs 3,050. RIL shares 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 its intention to buy a 40% stake in Sterling and Wilson Solar Ltd (SWSL), backed by Shapoorji Pallonji, for Rs 2,845 crore. “In India, Reliance plans to use this cutting-edge technology (from REC Solar Holding) in its fully integrated PV panel, metallic silicon and PV panel manufacturing plant at the Dhirubhai Ambani Green Energy Giga Complex, Jamnagar, initially starting with a capacity of 4 GW per year and ultimately rising to 10 GW per year, ”said RIL President and CEO Mukesh Ambani.