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.
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