Leading Tyre Manufacturer entered into a captive power purchase agreement with Clean Max Omni Private Limited
The stock is up by 16 per cent in 1 year and a whopping 100 per cent in 5 years.
Madras Rubber Factory Limited (MRF Ltd), a prominent Indian tyre manufacturer, has entered into a strategic alliance with Clean Max Omni Private Limited, a renewable energy company. This partnership centres around a captive power purchase agreement (CPPA), where MRF will procure hybrid power from Clean Max Omni. In line with this collaboration, MRF will also acquire up to 26 per cent of Clean Max Omni's paid-up equity.
Clean Max Omni Private Limited, established in July 2023, is a relatively new entrant in the renewable energy sector. The company is dedicated to developing clean and sustainable energy solutions for various industries. While it has yet to commence commercial operations, Clean Max Omni's vision aligns seamlessly with MRF's commitment to environmental sustainability. The acquisition of a stake in Clean Max Omni represents a substantial step forward for MRF in securing a reliable and renewable energy source for its operations.
Key Details of the Partnership:
- Captive Power Purchase Agreement (CPPA): MRF will procure hybrid power from Clean Max Omni.
- Equity Acquisition: MRF will acquire up to 26 per cent of Clean Max Omni's paid-up equity.
- Target Entity: Clean Max Omni Private Limited, incorporated in July 2023.
- Investment Amount: MRF will invest Rs. 7.26 crores for the equity stake.
- Acquisition Timeline: The acquisition is expected to be completed within 3-4 months of signing the agreement.
- Regulatory Approvals: The acquisition is subject to necessary governmental and regulatory approvals.
This strategic partnership between MRF and Clean Max Omni marks a significant step towards promoting renewable energy adoption in India and aligns with the country's broader sustainability goals. By investing in a clean energy company, MRF is not only securing a reliable power supply but also contributing to a cleaner and greener future.
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About the Company
MRF Limited, a leading Indian conglomerate, is renowned for its diverse range of products, including tyres, sports goods, paints, and toys. As the parent company of the MRF Group, MRF has established a strong presence in the Indian market with a market share of 29 per cent in the tyre industry. Their flagship product, tires, caters to a wide range of vehicles, from passenger cars to heavy-duty trucks. Beyond tyres, MRF has expanded into sports goods, offering a variety of options for athletes and enthusiasts. Additionally, their Funskool brand focuses on educational and entertaining puzzles, games, and toys for children. With a commitment to quality and innovation, MRF has solidified its position as a trusted and respected brand in India.
The company has a market cap of Rs 53,613 crore with a PE ratio of 26, an ROE of 13 per cent and an ROCE of 16 per cent. The stock is up by 16 per cent in 1 year and a whopping 100 per cent in 5 years.Investors should keep an eye on this mid-cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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