JK Tyre & Industries Ltd. announced on Wednesday, July 9, 2025, that its Board of Directors has approved an investment of up to ₹1.22 crore to acquire a 26% equity stake in STTY RE Ltd. This strategic investment aims to secure solar power for JK Tyre's operations under the captive power route, ensuring a competitive and sustainable energy source for 25 years. The board meeting, where this decision was made, concluded at 4:15 P.M. Indian Standard Time.
| Particulars | Details |
|---|---|
| Target Entity | STTY RE Ltd. (STTY) |
| Investment Amount | Up to ₹1.22 Crore |
| Equity Stake Acquired | 26% |
| Consideration Type | Cash |
| Industry of Target Entity | Electric power generation (Solar Energy) |
| Project Capacity | 5 MWp Solar Power Project |
| Project Capex (by STTY) | Approx. ₹15.59 Crore |
| Completion Timeline | On or before October 31, 2025 |
The investment will see JK Tyre acquiring 26% of the equity shares of STTY RE Ltd., each with a face value of ₹10. STTY RE Ltd., incorporated on March 8, 2025, is a newly established entity focused on electric power generation using solar energy. Due to its recent incorporation, details such as turnover and size are not yet applicable. The company's registered office is located at Link House, 4th Floor, 3, Bahadur Shah Zafar Marg, New Delhi-110 002, and it operates exclusively within India.
Strategic Rationale
This strategic move is part of JK Tyre's broader initiative to enhance its energy efficiency and sustainability. The company has been actively exploring options for setting up a solar power project, and STTY RE Ltd. was shortlisted for offering a highly competitive rate to establish a 5 MWp Solar Power Project under the Captive Power Route. This arrangement will allow JK Tyre to procure solar power from STTY at a very competitive market rate for a period of 25 years, significantly contributing to its operational cost savings and reducing its carbon footprint.
Under the terms of the agreement, STTY RE Ltd. will be responsible for the entire capital expenditure of approximately ₹15.59 crore for the project. JK Tyre's financial commitment is limited to its equity investment of up to ₹1.22 crore, which represents its 26% holding in STTY, in compliance with current Captive Power Rules. Upon completion of this acquisition, STTY RE Ltd. will become an Associate of JK Tyre & Industries Ltd.
Financial Implications and Approvals
The acquisition will be executed through a cash consideration. The indicative time period for the completion of this acquisition is on or before October 31, 2025.
It is important to note that this transaction falls under the purview of related party transactions. Constituents of JK Tyre's Promoter Group, along with its subsidiary STL Green Energy Limited, currently hold 100% of the issued, subscribed, and paid-up Equity Share Capital of STTY RE Ltd. However, the company has affirmed that the proposed transaction is being conducted on an 'arm's length' basis. This has been further validated and approved by the Audit Committee of JK Tyre & Industries Ltd., ensuring transparency and adherence to corporate governance standards.
Outlook and Market Impact
This investment underscores JK Tyre's commitment to renewable energy and sustainable operations. By securing a long-term, competitively priced solar power supply, the company is poised to benefit from reduced energy costs and enhanced operational stability. This move is expected to positively impact the company's environmental, social, and governance (ESG) profile, aligning with global trends towards green energy adoption in industrial operations. The transition to captive solar power is a significant step towards achieving greater energy independence and operational efficiency for JK Tyre.
