UltraTech Cement agreed to buy a 26% stake in a solar power company this week. As many readers may know this is a common occurrence in the Indian cement sector due to local electricity legislation. Read on to find out more and why there may have been more such deals in 2026.
The Aditya Birla Group subsidiary agreed on 12 August 2026 to acquire a 26% stake in Solaris Horizon Energy for around US$3m. The latter company generates and transmits renewable energy. It was established in late 2025 and is a special purpose vehicle (SPV) intended to supply 91MWp DC or 65MW AC solar power in Chhattisgarh on a captive basis from a solar plant located in Mungeli. UltraTech Cement said that it made the transaction to meet its “...green energy needs, optimising energy cost and comply with regulatory requirements for captive power consumption under electricity laws.”
Other recent and similar acquisitions by UltraTech Cement include the purchase of 26% stakes in AMPIN C&I Power Forty Four in Odisha and Sunsure Solarpark Seven in Uttar Pradesh in March 2026. Elsewhere, Dalmia Bharat agreed to buy a 26% stake (on a fully-diluted basis) for US$1.8m in Oyster Green Hybrid Five in April 2026. This deal was to source 21.6MW (wind) and 14MWp (solar) for its plant at Kadapa in Andhra Pradesh. JK Lakshmi Cement agreed to buy at least a 26% stake for US$2.1m in STLC RE 1 in August 2026. The latter company is setting up a 29MW AC or 42MWp DC solar plant and a 28MWh battery energy storage system (BESS) to supply the cement producer’s Sirohi plant in Rajasthan. The addition of energy storage may be significant here as industrial users start to make renewable sources work 24-hours per day. In June 2026 it agreed to buy 26% stakes in DynoSpark Private and Elevate Solar Energy to supply its Udaipur and Durg cement plants respectively. And the list goes on…
Often Global Cement reports on cement companies entering into power purchase agreements (PPA) with renewable generators. In India the so-called 26% rule dates back to local legislation on electricity from the early 2000s. Under these laws to qualify as a captive power consumer a company needs to own at least 26% of a power project and use at least 51% of the electricity generated. The company then benefits from this by not having to pay cross-subsidy surcharges and additional surcharges. Hence the interest in SPVs. The earlier approach to this was for cement companies to buy 26% (or larger) stakes in captive thermal power plants or waste heat recovery (WHR) plants. They then started to switch to renewables from the late 2010s as the cost fell and sustainability targets grew. Further change came in 2026 when the government modernised the rules to include allowing the corporate group share to be 26% rather than on an individual plant basis.
India added 26GW of solar capacity and 3GW of wind capacity in the first half of 2026, according to JMK Research. This was nearly 70% of the total capacity added in 2025 as a whole, itself a strong year for renewables. Data from the Ministry of New and Renewable Energy placed the country’s cumulative renewable energy installed capacity at about 288GW. Anecdotally, as the examples above and others show, there also appears to have been a surge in cement companies in India buying 26% shares in renewable energy companies so far in 2026. As UltraTech Cement’s chair Kumar Mangalam Birla revealed at his company’s annual general meeting this week, in the 2026 financial year his company “...commissioned 371MW of renewable power and 63 MW of WHR systems. Green energy now accounts for 35.8% of [the] company’s total power mix.”
One driver has been the higher fuel costs arising from the US war with Iran. This has created some mixed financial results for Indian cement companies during the first quarter of 2026. As local press revealed this week, UltraTech Cement and Nuvoco Vistas reported growth in profits. Yet, Ambuja Cements, Shree Cement, Dalmia Bharat, JK Lakshmi Cement and Birla Corporation reported falling profits despite growing revenues.
These conditions look set to continue as the financial year progresses. Alongside this, expect to see more investment by cement companies in renewables. 26% looks set to remain the magic number for India-based cement producers under current energy supply conditions.
