Adani Power, owned by Gautam Adani, is reportedly in advanced discussions to purchase a 600 MW thermal power plant in Nagpur from Vidarbha Industries Power, a subsidiary of Reliance Power which recently went bankrupt. The deal, estimated to be worth between Rs 2,000 to 3,000 crore, could be a strategic move for Adani Power to expand its presence in the thermal power sector. This news comes after Reliance Power, led by Anil Ambani, sold its wind power project and settled a large debt with a subsidiary in an effort to manage its financial situation.
Adani Power poised to acquire Reliance Power's Nagpur plant
In a significant move, Adani Power, owned by Gautam Adani, is reportedly in advanced talks to acquire a 600 MW thermal power plant in Nagpur from Vidarbha Industries Power, a subsidiary of Reliance Power led by Anil Ambani. The deal, estimated to be worth between Rs 2,000 to 3,000 crore, could be a strategic move for Adani Power to expand its presence in the thermal power sector.
The development comes as Reliance Power, facing financial challenges, has been divesting assets and settling debts. Recently, the company sold its wind power project and settled a large debt with a subsidiary in an effort to improve its financial situation.
Background
Reliance Power, founded by Anil Ambani, has been facing financial difficulties for several years due to a combination of factors including high debt, regulatory hurdles, and a drop in demand for power. In 2019, the company defaulted on its debt obligations and was declared bankrupt by the National Company Law Tribunal (NCLT).
Adani Power, on the other hand, has been expanding its presence in the power sector through acquisitions and investments. In 2021, it acquired the thermal power assets of GVK Power and Infrastructure for an estimated Rs 3,000 crore. The company is also reportedly interested in acquiring the power plants of Lanco Infratech and RattanIndia Power.
Significance of the deal
If the deal materializes, it will mark a significant expansion for Adani Power in the thermal power sector. The Nagpur plant is located in a strategically important region with high demand for power. The acquisition would also give Adani Power access to Vidarbha Industries Power's existing customer base.
For Reliance Power, the sale would provide much-needed funds to reduce its debt burden. It would also allow the company to focus on its core businesses, such as renewable energy and transmission.
FAQs
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