Amara Raja Batteries Limited (ARBL) on Friday said it will be investing over Rs 9,500 crore, over a period of 10 years for setting up research and development, and a greenfield manufacturing facility for lithium-ion battery-making in Mahbubnagar district of Telangana.

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Jayadev Galla, Chairman and Managing Director of ARBL, said the investment will push Amara Raja towards its next phase of growth and also support the growth of Telangana in taking ahead the objective of becoming a hub for EV sector.

The proposed facility will have a Lithium Cell Gigafactory with ultimate capacity up to 16 GWh and a battery pack assembly unit up to 5 GWh, the company said.

The upcoming facilities are expected to provide employment opportunities to about 4,000 people over a period of time.

Talking to media persons after signing a MoU with the state government, Chief Financial Officer, ARBL, Delli Babu, said the overall investment of Rs 9,500 crore is expected to be in at least four or five phases and the investment cycle for the first phase may take at least another two to three years time frame depending on how the project gets implemented.

"The initial phase could entail an investment of around anywhere between Rs 1,500 crore to Rs 2,000 crore and that will be funded entirely through the internal accruals of Amara Raja Batteries Ltd," Babu said.

Jayadev Galla said his company may be setting up the giga plant for the first time for lithium-ion but the firm has been working on the lithium-ion technology for quite some time.

ARBL established a pilot plant in Tirupati three years ago and has been producing cells in that plant to validate the product design.

He further said the company tied up with technology partners for the manufacturing process and the industrialisation process and is confident that it will be able to produce cells that can compete both on performance as well as cost in the Indian and global market.

Replying to a query, he said the battery maker reached saturation point in both of its sites in Tirupati and in Chittoor in Andhra Pradesh and reached maximum capacity. "Lot of our market is in the northern region of India. So, when we look at expanding further, we will be looking at how to diversify our location in terms of better logistics to reach our customer base. We would be looking at more regional diversification for that. We are not reducing our footprint in Andhra Pradesh, we are committed to Andhra Pradesh," he said.

Reacting to another query, Galla said there are some issues with the Pollution Control Board of AP that are being solved through the legal system right now.

Telangana Minister for IT and Industries K T Rama Rao, who was present at the MoU signing ceremony, said the state has been a frontrunner in adopting sustainability, and it is a proud moment to welcome the country's largest ever investment in the lithium-ion cell manufacturing sector.

"Our aim is to become the most electrified state in India, and having a Gigafactory in Telangana further strengthens our aspiration to become an EV manufacturing hub and spearhead the EV revolution in India," Rama Rao said.

The company had last month announced the incorporation of a subsidiary named Amara Raja Advanced Cell Technologies Pvt. Ltd. Amara Raja has been working on Li-ion cell chemistries specifically suited for Indian subcontinent conditions, and already supplies lithium battery packs and chargers to some two- and three-wheeler original equipment manufacturers (OEMs), Galla said in his speech.