Mahanagar Gas dives into battery cell manufacturing with a mega India-based giga factory

Mahanagar Gas Limited (MGL) is making a bold move into India’s lithium-ion cell manufacturing industry, partnering with California-based International Battery Company, Inc. (IBC US). Through a Share Subscription Agreement (SSA) and Shareholding Agreement (SHA) signed on November 7, 2024, MGL will secure a 40% stake in International Battery Company India Private Limited (IBC India), a new joint venture aimed at bolstering the battery supply chain in India. The collaboration is poised to create a “giga factory” in Bangalore, setting a foundation for the indigenous production of prismatic lithium-ion cells tailored to Indian market demands.

India’s New Hub for Li-ion Cell Manufacturing

The facility, intended as a state-of-the-art manufacturing hub, will focus on developing prismatic NMC lithium-ion cells, designed specifically for India’s mobility and battery storage sectors. According to MGL’s Managing Director, Ashu Shinghal, this expansion aligns with the company’s strategic vision to diversify into cleaner energy solutions beyond its established natural gas distribution network. He emphasized that the new manufacturing venture would strengthen MGL’s positioning within India’s rapidly evolving renewable energy sector and contribute to India’s “Make in India” goals by reducing dependency on imported battery cells.

IBC’s CEO, Priyadarshi Panda, highlighted that IBC’s prismatic cells are engineered to meet the distinct requirements of Indian Original Equipment Manufacturers (OEMs) and consumers. He noted that local production would mitigate the foreign exchange outflow from importing lithium-ion cells, while simultaneously establishing a stable, indigenous supply chain.

Strategic Investment for a Cleaner Future

Under the terms of the agreement, Mahanagar Gas Limited and IBC US will collectively invest INR 230 crore to kickstart operations at the Bangalore giga factory. Mahanagar Gas Limited will have the right to appoint two directors on the IBC India board, while IBC US will appoint three. The partnership will not only introduce advanced lithium-ion cell production within India but is also projected to create significant employment opportunities in Bangalore, a major tech and manufacturing hub. Both companies have agreed to restrict any transfer of ownership to third parties for seven years, underlining their long-term commitment to this venture.

Expert Insights on MGL’s Strategic Expansion

Industry analysts view MGL’s foray into battery cell manufacturing as a calculated step, reflecting the company’s ambitions to diversify in a market where energy storage solutions are increasingly critical. With a comprehensive portfolio that already spans compressed natural gas (CNG) distribution, liquefied natural gas (LNG) retail, and electric vehicle charging infrastructure, MGL’s involvement in battery manufacturing rounds out its energy portfolio.

“Venturing into lithium-ion cell production marks a notable pivot for MGL,” an energy sector expert commented, adding that MGL’s collaboration with IBC aligns with India’s National Electric Mobility Mission Plan, aiming to boost domestic production of batteries to meet future EV demand. The move is expected to reduce India’s reliance on costly imports and fuel the nation’s journey towards energy independence.

MGL’s Continued Transformation with IBC’s Global Expertise

IBC, a pioneer in lithium-ion cell production, has an established pilot facility in Seoul, South Korea, equipped with certifications such as UN 38.3 and BIS. With cutting-edge technology and deep expertise in cell development, IBC’s involvement will bring globally validated processes and products to the Indian market. Additionally, IBC’s strong financial backing from prominent investors like RTP Global and BEENEXT has reinforced its capabilities in battery technology, laying a solid foundation for a robust partnership with MGL.

Panda expressed enthusiasm over the partnership with Mahanagar Gas Limited, citing the synergy between IBC’s innovation in lithium-ion technology and MGL’s proven operational expertise in the Indian energy landscape. “This partnership will not only build India’s lithium-ion cell manufacturing infrastructure but also solidify a local supply chain for critical energy storage technologies,” Panda remarked.

As Mahanagar Gas transitions into a new chapter with lithium-ion cell production, this venture may reshape India’s renewable energy industry and underscore the nation’s commitment to developing a sustainable energy future.