Adani buys Reliance Energy’s Mumbai biz for Rs 18,800 crore

Shiv Kumar

Tribune News Service

Mumbai, December 21

Industrialist Gautam Adani is set to enter Mumbai electricity distribution market following the purchase of Anil Ambani-controlled Reliance Energy valued at Rs 18,800 crore.

According to a statement filed by Ambani’s Reliance Infrastructure with the stock exchanges, the company has signed a definitive binding agreement with Adani Transmission Ltd. (ATL) for 100% stake sale of its Mumbai power business, which includes integrated business of generation, transmission and distribution of power. The statement added that the deal has been valued at Rs 13,251 crore.

While the Reliance Energy business is valued at Rs 12,101 crore, regulatory assets approved so far have been valued at Rs 1,150 crore.

In addition, Reliance Infrastructure said, regulatory assets under approval were estimated at Rs 5,000 crore and net working capital on closing has been pegged at Rs 550 crore thus taking the total consideration to Rs 18,800 crore.

Following the sale of Reliance Energy to Adani, RInfra will become debt-free and end up with Rs 3,000 crore cash surplus.

“The acquisition marks our foray into the distribution sector in India. We see distribution as the next sunrise sector as India embarks on its mission to achieve 24x7 power for all,” Gautam Adani, Chairman of the Adani Group, said.

Reliance Energy, which mainly supplies power to Mumbai’s suburbs, caters to nearly 3 million residential, industrial and commercial consumers. Reliance Energy, which was earlier known as BSES before being taken over by the Ambanis, has annual revenue of Rs 7,500 crore. Tata Power is the other big player in the Mumbai power distribution market while the civic-owned BEST supplies power to South Mumbai.

Following the sale of the power distribution business, RInfra will focus on asset-light EPC and Defence businesses, the statement to the exchanges added.

(Power)ful acquisition 

• Reliance Infrastructure has signed a definitive binding agreement with Adani Transmission Ltd. for 100% stake sale of its Mumbai power business, which includes integrated business of generation, transmission and distribution of power
• Reliance Energy business is valued at Rs 12,101 crore while regulatory assets approved so far have been valued at Rs 1,150 crore
• Besides, Reliance Infrastructure said, regulatory assets under approval were estimated at Rs 5,000 crore and net working capital on closing has been pegged at Rs 550 crore thus taking the total consideration to Rs 18,800 crore