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Glenmark Pharmaceuticals Invests in O2 Renewable Energy XXIV with 34% Stake
Team Finance Saathi
18/Dec/2024
What's covered under the Article:
- Glenmark Pharmaceuticals acquires a 34% stake in O2 Renewable Energy XXIV Private Limited as part of its renewable energy initiative.
- The investment will help Glenmark meet its goal of becoming carbon neutral by 2030.
- The acquisition is in line with regulatory requirements for being a captive user under Indian electricity laws.
On 18th December 2024, Glenmark Pharmaceuticals Limited disclosed the completion of its acquisition of a 34% stake in O2 Renewable Energy XXIV Private Limited (SPV), a special-purpose vehicle (SPV) focused on renewable energy projects, particularly in the field of solar energy. This acquisition was made in line with Glenmark’s ongoing efforts to meet its carbon-neutral target by 2030, marking a significant step toward sustainable business practices.
Acquisition Overview
This acquisition follows a Securities Subscription & Shareholder’s Agreement (SSSA) entered into earlier in May 2024, with O2 Renewable Energy XXIV Private Limited and O2 Energy SG Pte. Ltd. The deal includes the purchase of both equity shares and Compulsorily Convertible Debentures (CCDs) in the target entity, with an investment totaling Rs. 1.99 Crores.
- Equity Share Subscription: Glenmark has invested Rs. 17 lakhs for a 34% equity stake in the SPV.
- Convertible Debenture Subscription: The company has also invested Rs. 158 lakhs for 34.57% in CCDs.
The SPV, O2 Renewable Energy XXIV Private Limited, was incorporated on 20th February 2024 and focuses on renewable energy generation, including solar energy and other non-conventional energy sources. It is poised to develop infrastructure projects and act as a key player in India’s renewable energy sector.
Strategic Impact of the Acquisition
This move aligns with Glenmark Pharmaceuticals' sustainability strategy as it looks to increase the share of renewable energy in its operations. This acquisition also enables the company to become a captive energy user, thereby meeting the regulatory requirements under Indian electricity laws. By investing in solar energy and other renewable sources, Glenmark is bolstering its commitment to carbon neutrality by 2030 and contributing to the country’s transition to cleaner energy.
Regulatory Disclosure
In line with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the recent SEBI Circular (July 2023), Glenmark Pharmaceuticals has submitted a comprehensive update, ensuring full compliance with the required disclosure norms. The details of the acquisition have been shared with both BSE and NSE to keep investors informed.
O2 Renewable Energy XXIV Private Limited: A Brief Overview
O2 Renewable Energy XXIV Private Limited is a recently incorporated entity (February 2024) based in India. Its focus is on solar energy generation, along with the production, transmission, and distribution of electrical power derived from renewable energy sources. The SPV also aims to develop off-grid and grid-connected energy infrastructure, making it an important player in India’s renewable energy market.
Although the company has not yet published its first financial statements, its business model focuses on expanding India’s renewable energy capacity, supporting both residential and industrial consumers with clean energy solutions.
Future Prospects
This acquisition is just the beginning of Glenmark Pharmaceuticals' journey toward achieving carbon neutrality. As the company continues to grow its renewable energy investments, it is expected to contribute not only to Glenmark’s long-term sustainability but also to India’s renewable energy landscape.
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