Adani's power arm is reportedly planning to acquire the 600 MW Butibori thermal power project in Nagpur. The plant was previously owned by the now-bankrupt Reliance Power Ltd, led by Anil Ambani.
According to sources cited in a report by Mint, the deal is likely to be valued anywhere between Rs 2,400-3,000 crore (translating to Rs4-5 crore per MW). The acquisition is expected to increase the positioning of the conglomerate in the energy sector alongside leveraging the growing electricity demand in the country.
"The value of the project, which consists of two power plant units, was earlier around Rs 6,000 crore, but currently, the production (power generation) has stopped; so, the valuation has to be lower. The plant fits into Adani's strategy," as per a source cited in the report.
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The Butibori project is operated by Vidarbha Industries Power, which is a subsidiary of Reliance Power. Currently, CFM ARC is the sole lender to the project, having purchased all of its loans for Rs 1,265 crore.
Adani Power reported a revenue of Rs 60,281 crore and a net profit of Rs 20,829 crore for FY24. The company has an installed capacity of 15.25 GW across nine power plants and is the only independent power producer with in-house mine-to-plant logistics. This includes managing 60 million metric tons per annum (mmtpa) of coal and 13 mmtpa of fly ash.
This project is a part of the conglomerate's larger plan to connect its coal-based power plant in Tiroda with the Butibori project. This integration will help the company in resuming power supply to Mumbai and neighboring areas, giving Adani a competitive advantage over rivals such as Tata Power and MSEDCL.
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On year-to-date basis, the shares of Adani Power have delivered returns of more than 30 per cent on the National Stock Exchange. Interestingly, the shares of the company remained unaffected after Hindenburg came out with a follow-up report against the conglomerate.
