RIL acquires 26% stake in Adani’s Mahan unit to establish captive power

The businesses separately informed exchanges on March 28 that RIL will purchase 5 crore shares of MEL for Rs 50 crore, providing the company with access to 500 megawatts (MW) of capacity that it intends to use for captive purposes.

Business

By Sneha Sengupta On Mar 28, 2024

In a transaction combining two of the biggest conglomerates in India, Gautam Adani’s Adani Power subsidiary Mahan Energen Ltd (MEL) would be acquired by Reliance Industries Ltd (RIL), owned by Mukesh Ambani, for a quarter of a percent.

“The proposed investment by the company is in compliance with the provisions of Electricity Rules, 2005 in terms of which the company, as a captive user, is required to own 26 percent proportionate ownership in one unit of MEL of 600 MW capacity, with RIL being the captive user of 500 MW generation capacity,” RIL said in a statement.

Both Adani Power and RIL stated that their transaction complies with the Electricity Rules, 2005’s definition of the captive user policy.

According to Adani Power, RIL will use a 600 MW unit of MEL’s Mahan thermal power plant as its captive unit. “This development brings between two corporates an exclusive arrangement for 500 MW of power purchase by Reliance Industries on a long-term basis”.

“The investment is subject to customary conditions precedent, including receipt of requisite approvals by MEL, and is expected to be completed within two weeks of receipt of completion of conditions precedent and receipt of such approvals by MEL,” RIL stated.

On March 27, an investment agreement was signed by the two parties. The transaction conclusion is contingent upon the fulfillment of normal closing requirements, such as obtaining the necessary approvals.

MEL intends to add an additional 1,600 MW to its current 1,200 MW of operating capacity.

Adani Power RIL