Ambani and Adani Join Forces: Reliance Buys Stake in Adani’s Power Project

In a remarkable move, two of India’s richest businessmen, Mukesh Ambani and Gautam Adani, have joined forces for the first time. Reliance Industries, owned by Ambani, has acquired a 26% stake in a power project owned by Adani’s company in Madhya Pradesh.

The Deal

• Reliance Industries will purchase 5 crore equity shares (worth ₹50 crore) in Mahan Energen Ltd, a wholly-owned subsidiary of Adani Power Ltd.
• The shares have a face value of ₹10 each and are being bought at par.

Power Plant Details

• Mahan Energen Ltd operates a thermal power plant in Madhya Pradesh with a total capacity of 2800 MW.
• As part of the deal, one unit of the power plant with a capacity of 600 MW will be designated as a Captive Unit for Reliance Industries.

Captive User Benefits

• To avail the benefits of the Captive User policy, Reliance Industries must hold a 26% ownership stake in the Captive Unit.
• This stake is proportionate to the total capacity of the power plant.
• Reliance Industries will invest ₹50 crore to acquire 5 crore equity shares in Mahan Energen Ltd, giving it the required 26% ownership.

Exclusive Power Purchase

• This deal essentially establishes an exclusive arrangement for Reliance Industries to purchase 500 MW of power from Adani Power on a long-term basis.

The collaboration between the two business giants marks a significant development in the Indian energy sector and highlights the growing importance of strategic partnerships in the industry.