Aditya Birla Group taps local lenders for Sprng Energy

Mumbai: Aditya Birla Group is in advanced discussions with domestic lenders to raise about ₹14,000 crore through a long-term loan syndication to fund its acquisition of Shell's Indian renewable energy platform Sprng Energy, according to people familiar with the matter.

Axis Bank has underwritten the entire amount and is likely to keep a large part of around ₹5,000 crore to the financing, while State Bank of India and HDFC Bank are evaluating commitments for the remaining amount, the people said. Aditya Birla has also held discussions with six to seven other domestic lenders, but prefers to close the financing with two banks, or a maximum of three lenders, they said.

The proposed financing is being structured as a domestic lending syndication or club loan and is expected to be secured against Sprng Energy's renewable power assets. The loan could have a tenor of up to 20 years, with pricing being discussed below 8% at around 7.7%, according to the people. Some international lenders, including MUFG, have evaluated the financing but have been unable to match the pricing offered by the more active domestic lenders, particularly Axis Bank, given the latter's focus and appetite for long-tenor project finance in India, one of the people said.


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The transaction comes as Aditya Birla seeks to fund the acquisition with cheaper, longer-duration domestic debt rather than relying on bridge financing. This transaction is amongst the largest acquisitions in India's renewable energy sector both by value and scale. The transaction values the business at an enterprise value of ₹17,200 crore. The equity consideration payable to the seller will be determined after adjusting for debt, cash, and other items as specified in the transaction documents.

The company had said that the acquisition will be funded through a mix of debt and equity infusion from Grasim and funds managed by Global Infrastructure Partners, a part of Blackrock. This transaction adds a contracted portfolio of around 5 GWp capacity, of which around 3.3 GWp of operational capacity and 1.7 GWp, of under construction capacity, along with a strong connectivity and development pipeline.

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The proposed ₹14,000-crore debt facility would therefore represent a substantial portion of the acquisition funding, with the balance expected to be funded through the group's own resources and other sources. Banks are increasingly competing for large corporate and infrastructure financing mandates as demand for long-duration rupee funding remains strong. Emails sent to banks and Aditya Birla did not respond to request for comment.