Hindalco Industries said on Tuesday it will invest 8 billion rupees ($96 million) to set up a battery foil manufacturing facility to tap the expanding electric vehicles market in India, the world's third-largest car market.

The plant, set to be opened in the eastern state of Odisha, is slated to be operational by July 2025 and will produce 25,000 tonnes of aluminium foils, a key component in lithium-ion cells essential for rechargeable batteries, which are primarily used in electric vehicles (EVs), the company said in a statement.

Shares of the company rose more than 2% after the announcement.

The domestic EV market is expected to grow at a compound annual growth rate of 49%, amounting to yearly sales of 10 million units by 2030, according to a recent annual Economic Survey.

"We are seeing a strong traction in battery materials demand, driven by an impressive outlook for the EV and grid storage sectors." Managing Director Satish Pai said in a statement.

The Aditya Birla Group-owned company also said it is co-developing and making components - like battery enclosures, motor housing, and busbars - in collaboration with original equipment manufacturers (OEM), without specifying names.

Hindalco has a plant in the western state of Maharashtra, which is currently in the process of making battery foils for lithium-ion cells in India.

 

($1 = 83.3650 Indian rupees)

(Reporting by Manvi Pant in Bengaluru; Editing by Dhanya Ann Thoppil and Sonia Cheema)