IMFA locks 65 MW green power with ₹110 crore stake

What IMFA announced

Indian Metals & Ferro Alloys (IMFA) said it has acquired a 26% equity stake in EG Urja Strot Private Limited for ₹110.18 crore, strengthening its renewable energy sourcing and long-term energy security. Alongside the equity investment, IMFA has executed a long-duration power purchase agreement (PPA) to secure power for its ferrochrome operations. The company’s stated objective is to reduce exposure to fluctuations in grid power costs for an energy-intensive manufacturing business. The structure also reflects the growing importance of renewable procurement for industrial firms managing carbon-related compliance costs.

Equity stake purchase: size and consideration

IMFA’s investment involves subscribing to 26% of the equity capital of EG Urja Strot. The total consideration is ₹110.18 crore, payable in cash in one or more tranches, as disclosed in the company’s communication. IMFA described the acquisition as part of its broader push to increase the share of renewable power in its overall energy mix. The counterparty, EG Urja Strot Private Limited, operates in the renewable energy sector. The entity was incorporated on 6 March 2025 and, as noted in the disclosure context, has no turnover history as it functions as a project vehicle.

29-year captive PPA: the core of the energy-security plan

The operational centerpiece of the transaction is a 29-year PPA signed under the captive consumer framework. Under this arrangement, IMFA will contract 65 MW of hybrid renewable power for its ferrochrome business. The agreement operates within the captive consumer structure as defined under the Electricity Act, 2003 and Electricity Rules, 2005. In India’s captive power framework, the ownership threshold is a practical requirement for consumers to be classified as captive users, which supports the commercial viability of such PPAs.

Project configuration: solar, wind, and battery storage

The underlying hybrid renewable project combines multiple generation sources and storage. It will include 81.4 MW of solar capacity and 102.6 MW of wind capacity, along with a 25 MWh battery energy storage system (BESS). IMFA will draw 65 MW from this project as a captive consumer. The design indicates an intent to provide a more stable renewable supply profile than a single-source project, with the BESS component adding flexibility in dispatch.

Timeline: completion target and sequencing

IMFA said the project is expected to be completed by June 2027. The announcement also links this agreement to IMFA’s previously disclosed renewable sourcing plan. The company had earlier announced a 70 MWp hybrid renewable energy sourcing arrangement, which is expected to commence in the second quarter of FY2026-27 (FY27). With the addition of the new project, IMFA’s contracted renewable energy portfolio has increased to 135 MW.

Why renewable power matters for ferrochrome operations

Ferrochrome production is power intensive, and the cost of electricity can influence operating competitiveness. IMFA’s move to lock in long-term renewable supply is positioned as a hedge against rising energy expenses and volatility in grid tariffs. By shifting a portion of its power procurement to contracted renewable sources under a captive structure, IMFA is building a clearer line of sight into energy availability and cost stability over a long period.

Carbon compliance costs and industrial decarbonisation

The transaction also reflects a second pressure point for industrial producers: increasing carbon compliance expectations and related costs. IMFA described the renewable addition as a strategic step to manage carbon compliance expenses for energy-intensive manufacturing. For ferrochrome producers, renewable sourcing can influence emissions intensity of production, which is relevant to downstream value chains and market expectations for lower-carbon raw materials.

Company commentary and stated rationale

IMFA’s management linked the acquisition to its long-term energy strategy. Binoy Agarwalla, Vice-President and Head, Power Business Unit, said the acquisition aligns with IMFA’s long-term plan to strengthen energy security while increasing the share of renewable power in the company’s overall energy mix. The company framed the PPA and equity participation as a combined approach: long-term procurement backed by ownership to meet captive requirements.

Key facts at a glance

What investors and industry watchers may track next

The next operational milestone is the completion of the hybrid project by June 2027, alongside the commencement timeline of the earlier 70 MWp hybrid sourcing plan expected in Q2 FY27. Over time, the relevance of the 135 MW contracted renewable portfolio will be assessed through disclosures on power sourcing mix and the stability of energy costs for ferrochrome operations. The structure of the transaction, combining a captive PPA with a 26% equity stake, shows how large industrial power buyers are adapting procurement to regulatory frameworks while seeking long-term cost visibility.

Conclusion

IMFA’s ₹110.18 crore investment for a 26% stake in EG Urja Strot, paired with a 29-year captive PPA for 65 MW, is a clear step toward long-tenor renewable sourcing for ferrochrome operations. The hybrid project, including solar, wind, and battery storage, is targeted for completion by June 2027. IMFA has also reiterated that this agreement builds on its earlier 70 MWp plan, taking its contracted renewable portfolio to 135 MW. The next confirmed checkpoints are the project completion timeline and the commencement schedule already outlined for FY27.