Striking another major deal in less than four months, Adani Power, on Monday, entered into a binding agreement with Gautam Thapar-led Avantha group to buy out its 600-MW Korba West unit for more than Rs.4,200 crore.
This is the second acquisition by the Adani group since it bought the 1,200-MW coal-fired Udupi plant from the debt-laden Lanco Infra for Rs.6,000 crore in August.
Korba West Power owns a completed 600-MW coal-based power plant at Korba, and an expansion phase is in progress. The deal makes Adani Power the largest private sector power utility in the country with an installed capacity of 11,040 MW, the Adani group said in a statement issued from Ahmedabad. While the Adanis did not reveal the deal size, the Avantha group, in a statement issued from New Delhi, said the deal is valued in excess of Rs.4,200 crore.
With the Korba buy, the installed base of Adani Power will increase to 11,040 MW. The company has set a target of 20,000 MW capacity by 2020.
Commenting on the deal, Adani group chairman Gautam Adani said, “This is the time for consolidation in the power sector, and Adani Power has taken the lead in acquiring power assets, which are strategic fit to group businesses and potentially at the lowest end of the cost curve.
“This acquisition consolidates our pan-India presence, and further reaffirms our belief in the reforms processes underway in the power and coal mining sectors.
“This Korba acquisition expands our footprint, particularly in the coal mining belt, and we are bullish of expanding our presence further. We are committed towards achieving our target of 20,000 MW by 2020,” Mr. Adani said. He added that his company would endeavour to expand the capacity of the Korba unit expeditiously, leveraging its project execution capabilities.
Adani Power was also committed to seize further opportunities for capacity addition and provide the much needed energy security of India, he further said.
Macquarie Capital was the sole advisor to the transaction. Excluding the Korba power deal, Adani Power has operational capacity of 9,240 MW, comprising 4,620 MW at Mundra in Gujarat, 3,300 MW at Tiroda in Maharashtra and 1,320 MW at Kawai in Rajasthan. It has a 660 MW plant ready for commissioning at Tiroda in Maharashtra shortly.
Shares rise nearly 3 % Shares of Adani Power surged by 2.65 per cent to settle at Rs.46.55 on the BSE. During the day, it moved up by 3.41 per cent to Rs.46.90.
At the NSE, it rose by 2.42 per cent to end at Rs.46.55.
On the volume front, 8.48 lakh shares of the company changed hands on the BSE, while over 51 lakh shares were traded on the NSE during the day.
