Ambani, Adani join hands for power project

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In the first collaboration,  billionaires Mukesh Ambani’s Reliance Industries has picked up a 26 per cent stake in a Madhya Pradesh power project of Gautam Adani. The Ambani company will use the plants’ 500 MW of electricity for captive use. The two firms in separate filings in stock exchange said Reliance will pick up 5 crore shares in Mahan Energen Ltd, a wholly owned subsidiary of Adani Power, of face value Rs 10 at par.

With Ambani’s interests in oil and gas to retail and telecom and Adani’s focus on infrastructure spanning sea ports to airports, coal and mining, they have not treaded on to each other’s industries. The only common industry has been the green energy business where both of them announced multi-billion dollar investments.

Adani aspires to be the world’s largest renewable energy producer by 2030 while Reliance is building four gigafactories at Jamnagar in Gujarat — one each for solar panels, batteries, green hydrogen, and fuel cells. Adani is also building three giga factories for manufacturing solar modules, wind turbines and hydrogen electrolysers.

“Mahan Energen Ltd (MEL), wholly owned subsidiary of Adani Power Ltd (APL), has entered into a 20-year long-term power purchase agreement (PPA) for 500 MW with Reliance Industries Ltd (RIL), under the captive user policy as defined under the Electricity Rules, 2005,” Adani Power said in the filing.

One unit of 600 MW capacity of MEL’s Mahan thermal power plant, out of its aggregate operating and upcoming capacity of 2,800 MW, will be designated as the captive unit for this purpose.

“In order to avail the benefit of this policy, RIL has to hold a 26 per cent ownership stake in the captive unit in proportion to the total capacity of the power plant. It will accordingly invest in 5 crore equity shares of MEL, aggregating to Rs 50 crore for the proportionate ownership stake,” the filing said.

Reliance in the filing made a similar disclosure, adding, “MEL, a company engaged in generation and supply of power, was incorporated on October 19, 2005. The turnover of MEL, as per its audited standalone financial statement, for financial years 2022-23, 2021-22 and 2020-21 was Rs 2,730.68 crore, Rs 1,393.59 crore and Rs 692.03 crore, respectively.” “The investment is subject to customary conditions precedent including receipt of requisite approvals by MEL and is expected to be completed within 2 weeks of receipt of completion of conditions precedent and receipt of such approvals by MEL,” it added.

(With inputs from PTI)