Aditya Birla Renewables taps MUFG for $1.5 billion to fund Shell asset buy

A unit of billionaire Kumar Mangalam Birla’s conglomerate has lined up around $1.5 billion of acquisition financing from Mitsubishi UFJ Financial Group Inc. to fund its purchase of Shell Plc’s renewable energy assets in the country, according to people familiar with the matter.

Japan’s largest lender has solely underwritten the facility, which will be raised through the so-called external commercial borrowing route with a five-year tenor, the people said, asking not to be identified because the discussions are private. Aditya Birla Renewables Ltd. is the borrower.

The loan will be priced at an all-in cost of about 160 basis points over the Secured Overnight Financing Rate, or SOFR, they said. All-in costs take account both of the margins lenders pay on their loans and the fees they offer to banks at different levels.


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An Aditya Birla Group spokesperson said the conglomerate is in touch with multiple banks with whom they have a strong relationship and who have shown willingness to underwrite the full amount. “We continue to engage with them to secure the best terms,” the spokesperson added.

MUFG did not immediately reply to Bloomberg’s email seeking comment.

On Monday, Aditya Birla Renewables said it will acquire 100% of Solenergi Power Pvt. to get control of its five-gigawatt renewable energy portfolio. The deal will be funded through debt alongside equity to be injected by Aditya Birla Renewables’ parent Grasim Industries Ltd. and Global Infrastructure Partners, according to a company statement.

The financing underscores the growing role of Japanese lenders in backing large cross-border acquisitions involving Indian companies. MUFG has emerged as one of the country’s most active acquisition financiers, capitalizing on robust deal activity and rising demand for offshore funding.

In May, MUFG was among the three original lead banks backing Sun Pharmaceutical Industries Ltd.’s $12 billion acquisition financing, one of the largest such deals involving an Indian company. The Japanese behemoth, which surpassed Toyota Motor Corp. to become the most valuable firm in its domestic market this week, has also signed a pact with the State Bank of India, the country’s biggest lender.

MUFG will down-sell a portion of the loan later once the loan syndication is launched, said the people.

The deal comes as India’s acquisition financing market is gathering momentum. The Reserve Bank of India has recently taken steps to allow local lenders to finance as much as 75% of the acquisition value of corporate takeovers. The move is expected to intensify competition with foreign lenders and private credit funds in a market historically dominated by global banks.