Mukesh Ambani’s Reliance Industries Dives into Power Sector with Strategic Investment
In a significant move within India’s corporate landscape, Reliance Industries Ltd (RIL), under the leadership of Mukesh Ambani, has finalized a deal to acquire a 26 percent stake in Mahan Energen Ltd (MEL), a subsidiary of Adani Power, led by Gautam Adani.
Under the agreement, RIL will purchase 5 crore shares of MEL for Rs 50 crore, granting access to a 500 megawatts (MW) capacity, which RIL plans to utilize for captive purposes. MEL currently operates two power units, each with a capacity of 600 MW, and was acquired by Adani Power from Essar Power in March 2022.
According to RIL, this investment aligns with the provisions of the Electricity Rules, 2005, mandating a 26 percent ownership for captive users in a power unit. As part of the deal, MEL and RIL have also entered into a 20-year power-purchase agreement.
Adani Power confirmed that a 600 MW unit from MEL’s Mahan thermal power plant will exclusively cater to RIL’s captive power needs. This collaboration signifies a long-term commitment, with RIL set to purchase 500 MW of power from Adani Power.
The investment agreement between the two conglomerates was inked on March 27, with the transaction awaiting customary closing conditions and regulatory approvals.
MEL currently operates at a capacity of 1,200 MW and has ambitious plans to further expand its capacity by an additional 1,600 MW.
While the investment is subject to standard closing conditions and regulatory approvals, both RIL and Adani Power anticipate the transaction to be completed within two weeks.
