Holtec plans to go public early next year to part-finance proposed SMR-based nuclear projects in India: CEO

“Foreign companies are now getting ready to come and invest in India… At our end, we understand that a lot of capital is needed to do that. Of course, we will borrow capital, but our own capital has to be increased. So we have launched a programme for early next year, and around April or so, we will do an IPO. In addition to the public offering, we will also do some private placement… So, a portion of the funds (being raised) will be through the IPO, while another portion would be through private placement… We want to raise about $5 billion to begin with, and then, of course, we will raise more. And the one main reason I’m doing it is so that we can go build in India,” Singh told The Indian Express.

On the private placement plan, Singh said he proposes to unbundle parts of the company (Holtec International) and offer some of these segments to investors through the private market, including sovereign wealth funds. The idea, he said, is to altogether raise about $5 billion by mid next year, between April and June 2026, so that Holtec International is “well placed to begin construction of SMRs in India”.

“That is, if India puts in place the legislative provisions needed for enabling these investments. If that does not go through, I will direct that (the funding) to other places. But the idea is to get ready in the hope that the Indian government will clear the way for us to invest,” Singh said.

If completed, Holtec’s IPO would be the largest nuclear energy listing in years. Holtec’s planned entry into the public markets comes at a time of surging interest in nuclear energy from data centers and the clean energy transitions planned by utilities across markets. The company is also learnt to be in talks with Abu Dhabi-based investment fund International Holdings Company for a potential fundraise.

Holtec’s significance in the Indian context

For India, Holtec holds special significance. Unlike Westinghouse Electric Co. and GE Hitachi Nuclear Energy, the two American nuclear industry flag bearers that were seen as early frontrunners for an entry into India’s civil nuclear sector, the smaller, privately-owned Holtec is now suddenly in the lead to invest in the country’s nuclear sector. The company was accorded an unprecedented regulatory clearance by the US DoE less than three months ago that potentially sets it on course to leverage the commercial potential of the Indo-US civil nuclear deal. The March 26 approval from DoE effectively cleared Holtec International’s application for specific authorisation with respect to the DoE’s restrictive regulation that is referred to as ‘10CFR810’. This specific authorisation (SA IN2023-001) now conditionally permitted Holtec to transfer “unclassified small modular reactor technology” to its regional subsidiary Holtec Asia, as well as Tata Consulting Engineers Ltd, and Larsen & Toubro Ltd in India.

Holtec’s pitch is for fostering a public-private initiative centred on the American company’s flagship small modular reactor, the SMR-300, to potentially help break this stasis in the nuclear engagement between the two countries, with the possibility of using existing coal plant sites in India to deploy its proposed SMR-based projects and the possibility of joint manufacturing at some point in the future.

For that to happen, the Indian government is gearing up to move two crucial amendments in the laws governing the country’s atomic energy sector. The first relates to the easing of provisions in the nuclear liability law while the second amendment is aimed at enabling private companies to enter nuclear power plant operations in the country, and could also enable foreign companies to potentially take a minority equity exposure in upcoming nuclear power projects. Hitherto, atomic energy has been one of India’s most closed sectors. The twin legal amendments are being seen as a reform push that could help leverage the commercial potential of the Indo-US civil nuclear deal nearly two decades after it was inked. New Delhi is also keen to package this as part of a broader trade and investment outreach with Washington DC, which could eventually culminate with a trade pact that is currently under negotiation.

The company already has a footprint in India with Holtec Asia operating in the non-nuclear energy business.

On the US side, the issue of getting a specific ‘10CFR810’ authorisation (Part 810 of Title 10, Code of Federal Regulations of the US Atomic Energy Act of 1954) had been a big regulatory hurdle for New Delhi. This is because the regulation, while giving American companies such as Holtec the ability to export equipment to countries such as India under some strict safeguards, explicitly barred them from manufacturing any nuclear equipment or performing any nuclear design work in India. This provision was a non-starter from New Delhi’s perspective, which wanted to participate in manufacturing the SMRs and co-produce the nuclear components for its domestic needs. With Washington DC having eased out the regulatory hurdle in the form of the 810 authorisation, the ball is now in New Delhi’s court to push through the two legislation at its end.

As of now, two SMR projects have reached the operational stage globally. One is an SMR named Akademik Lomonosov floating power unit in Russia that has two-modules of 35 MWe (megawatt electric) and started commercial operation in May 2020. The other is a  demonstration SMR project called HTR-PM in China that was grid-connected in December 2021 and is reported to have started commercial operations in December 2023. Apart from Holtec’s SMR-300, other emerging western contenders in the SMR segment include the Rolls-Royce SMR, NuScale’s VOYGR SMR, Westinghouse Electric’s AP300 SMR and GE-Hitachi’s BWRX-300.

Race for leadership in SMR manufacturing space

India is hoping to pitch itself as a credible alternative to the incumbents in this niche field, riding on its strong track record of having operated small-sized reactors over an extended period of time and the ability to manufacture nuclear reactors cost-effectively and at scale. This also comes at a time when Beijing is working on an ambitious plan to seize the opportunity of global leadership in the SMR space, unlike large reactors where China has been a latecomer.

Like India, Beijing is seeing SMRs as a tool of its diplomatic outreach in the Global South and that the country could shake up the SMR industry, just as it has done in the electric vehicle sector.

Established in 1986, Holtec provides spent fuel storage and logistics support for over 140 nuclear plants worldwide, as well as services such as nuclear decommissioning and increasingly, new reactor development. The company is now attempting what would be a first in American history—reviving a shuttered nuclear plant. The Palisades Nuclear Plant in Michigan, closed in 2022 for economic reasons, is slated to restart by the end of 2025 and this reactivation is being funded in part by a $1.5 billion loan guarantee from the US DoE. Holtec plans to install two of its own SMR-300 small modular reactors at the site, in collaboration with Hyundai Engineering & Construction. Holtec’s SMR-300 is a pressurised light-water reactor that will produce at least 300MWe of electric power on a small parcel of land. Unlike most traditional nuclear power plants that require large quantities of water, the SMR-300 can be adjusted to use an air-cooling system and the modular design means it is easy to scale up projects. The criticism is that there is still no commercial SMR project that is up and running and the viability of these units is yet to be proven.