MUMBAI: In a first, the sub-continent’s wealthiest billionaires who are also among world’s richest industrialists, Mukesh Ambani and Gautam Adani, are entering a ‘power’ deal. Ambani will pick up a minority stake in a power unit of Adani, their companies announced Thursday.
Ambani’s Reliance Industries will purchase 26% in Mahan Energen, a wholly owned subsidiary of Adani Power, for Rs 50 crore, and will source 500 megawatt of electricity from the Madhya Pradesh plant for its requirements.
The development, thanks to India’s electricity rules, brings the two corporates into an exclusive power arrangement for 20 years.
Adani Power said one unit of the 600MW capacity of its Mahan thermal power plant in MP will be designated as a captive unit in line with rules.
RIL needs to buy strategic stake to benefit from rules
In order to avail of the benefit of the rules, Reliance Industries will have to take a strategic 26% stake in the captive unit and accordingly, make an investment.
Reliance Industries did not disclose where it intends to use the power sourced from Mahan Energen. The deal is expected to be completed within two weeks of receiving all regulatory approvals. Reliance Industries already has captive power plants in its oil refining and petrochemical complex in Gujarat.
The two industrialists, both hailing from Gujarat, are often considered rivals by industry commentators and are seen slugging it out on various rich lists. Both, however, have built their empires on different lines of businesses.
While Ambani’s interests are in oil and gas, retail, telecom and financial services, Adani’s focus is on infrastructure spanning airports, seaports and cement. Both have rarely crossed each other’s ways except in recent times in certain businesses like media, clean energy and data centres.
Two years ago, a firm with connections to Ambani sold interests in news broadcaster NDTV to Adani, marking the latter’s first big play in the media sector. The deal pit him against Ambani, who runs Network 18, one of India’s largest media companies. The two industrialists have also pledged multi-billion dollar commitments in clean energy as they aim to achieve zero net carbon emissions by 2050. Earlier this month, Adani and his family, including wife and children, attended the pre-wedding celebrations of Ambani’s youngest son, Anant, in Gujarat.
Ambani, who took over Reliance Industries after the death of his father and the company’s founder, has a net worth of $117 billion and is ranked the 11th richest person in the world by Forbes. Adani is not far down in the list. A first-generation entrepreneur who started with commodities trading, Adani has a net worth of $81 billion and is listed the 17th richest person globally, according to Forbes.
Ambani’s Reliance Industries will purchase 26% in Mahan Energen, a wholly owned subsidiary of Adani Power, for Rs 50 crore, and will source 500 megawatt of electricity from the Madhya Pradesh plant for its requirements.
The development, thanks to India’s electricity rules, brings the two corporates into an exclusive power arrangement for 20 years.
Adani Power said one unit of the 600MW capacity of its Mahan thermal power plant in MP will be designated as a captive unit in line with rules.
RIL needs to buy strategic stake to benefit from rules
In order to avail of the benefit of the rules, Reliance Industries will have to take a strategic 26% stake in the captive unit and accordingly, make an investment.
Reliance Industries did not disclose where it intends to use the power sourced from Mahan Energen. The deal is expected to be completed within two weeks of receiving all regulatory approvals. Reliance Industries already has captive power plants in its oil refining and petrochemical complex in Gujarat.
The two industrialists, both hailing from Gujarat, are often considered rivals by industry commentators and are seen slugging it out on various rich lists. Both, however, have built their empires on different lines of businesses.
While Ambani’s interests are in oil and gas, retail, telecom and financial services, Adani’s focus is on infrastructure spanning airports, seaports and cement. Both have rarely crossed each other’s ways except in recent times in certain businesses like media, clean energy and data centres.
Two years ago, a firm with connections to Ambani sold interests in news broadcaster NDTV to Adani, marking the latter’s first big play in the media sector. The deal pit him against Ambani, who runs Network 18, one of India’s largest media companies. The two industrialists have also pledged multi-billion dollar commitments in clean energy as they aim to achieve zero net carbon emissions by 2050. Earlier this month, Adani and his family, including wife and children, attended the pre-wedding celebrations of Ambani’s youngest son, Anant, in Gujarat.
Ambani, who took over Reliance Industries after the death of his father and the company’s founder, has a net worth of $117 billion and is ranked the 11th richest person in the world by Forbes. Adani is not far down in the list. A first-generation entrepreneur who started with commodities trading, Adani has a net worth of $81 billion and is listed the 17th richest person globally, according to Forbes.