As the Tata Group ramps up its new energy bets, its battery arm Agratas Energy Storage Solutions Pvt Ltd. raised over $730 million from a clutch of banks in 2025, taking the total funding from lenders and parent Tata Sons' equity infusion to nearly $900 million. The funding push highlights the capital intensity and execution phase ahead of commercial operations.
Tatas' lithium ion cell arm secured the loans between January and December 2025 from banks including Axis Bank, DBS Bank, Hong Kong and Shanghai Banking Corp and Standard Chartered Bank, with an average interest rate of 5.25% and a payback period of nearly three years, Mint’s review of the company's filings with the corporate affairs ministry revealed.
Agratas is the latest Tata firm to close in on $1 billion funding for its project, with the group’s three other new ventures Air India, Tata Digital and Tata Electronics having already crossed $1 billion infusion from the parent firm.
Mint had reported on 7 November that investments into Air India, Tata Digital and Tata Electronics had crossed a cumulative $11 billion.
Under Chairman Natarajan Chandrasekaran, the conglomerate has used dividend income from flagship Tata Consultancy Services Ltd to start new businesses, including aviation (Air India), e-commerce (Tata Digital), iPhone assembly for Apple, a semiconductor business (Tata Electronics), and battery manufacturing (Agratas).
Debt drive
However, unlike Air India, Tata Digital and Tata Electronics, which have drawn large infusions from Tata Sons, Agratas is relying more on bank funding, pointing to a more asset-backed, lower-equity approach.
Agratas’ funding is largely being sourced through banks, with the company pledging all its movable assets to secure some of the loans. To lower its borrowing costs, the firm has taken the Gift City route for its large dollar-denominated loans.
This approach also reflects the strain of funding other new bets that are yet to turn profitable. Air India, Tata Electronics and Tata Digital had posted cumulative losses of ₹15,539 crore in the year ended March 2025, according to Tata Sons’ annual report.
Tata Semiconductor—a unit of Tata Electronics—and Agratas are yet to start operations, as their manufacturing facilities are still work in progress and nearing completion.
Last mile push
“In giga factories, the last mile before launch is often the most cash intensive and execution sensitive. So, securing funding at this point is crucial because it reduces the risk of delays, gives confidence to suppliers and customers, and helps the company manage the transition from construction to commercial ramp-up,” said Harshvardhan Sharma, group head of automotive technology & innovation at Nomura Research Institute Consulting & Solutions India.
Another point to note about Agratas here is the group’s willingness to bring an external investor into the company. The AESC Group, headquartered in Yokohama, Japan, bought a 12% stake in Agratas for ₹66 crore in March 2025. Chinese energy technology company Envision owns the AESC Group.
In 2024, Agratas had announced it would build a 40GWh electric battery manufacturing plant in Somerset, UK. The firm is also building a 20GWh plant in Sanand, Gujarat, which is expected to begin production in FY27. The plants will produce cells for EVs as well as battery energy storage solutions.
“The project to set up giga factories in India and the UK is on track and will commence operations from FY27 in a phased manner,” a Tata Motors spokesperson had told Mint in June.
This is expected to cater to the internal requirement for EV cells from Jaguar Land Rover and Tata Motors Passenger Vehicles as well as external demand.
Agratas is led by chief executive officer Thomas Flack, who had joined the firm in August 2023 after having spent six years as the chief procurement officer at Tata Motors. Earlier, Flack had spent over 14 years in Ford Motor’s operations in the US and China.
Agratas is yet to start commercial production of cells. On 2 April, the company said the steel frame of its Sanand factory was complete and that it is moving closer to cell production.
“Completing the steel frame at Sanand marks an important step in our journey towards operational readiness. As we move forward, our focus is on building the systems, processes and capabilities required to deliver reliable, world-class batteries made in India for the world, while developing a highly skilled workforce to support safe and high-quality manufacturing,” Deepak Khare, vice-president of manufacturing operations at Agratas, said in a statement.
