Two of India’s most significant business tycoons, Gautam Adani and Mukesh Ambani, have collaborated for the first time in the history of India. These two corporations have made exclusive arrangements for 500 MW of power purchase by Reliance Industries on a long-term basis. Reliance Industries has picked up 26% of Gautam Adani’s stakes in the Madhya Pradesh power project. The business group has also signed a pact to use 500 MW of electricity generated from the plant for captive use. Reliance Industries will pick up five crore equity shares in Mahan Energen Limited, a wholly-owned subsidiary of Adani Power Limited.
The equity shares will have a face value of Rs.10 at par INR 50 crore. Both these business tycoons are from Gujarat and have often been said to be competing with each other to make an extraordinary place for themselves in India’s dynamic business landscape. This collaboration is a significant milestone towards transforming India’s business infrastructure. It involves bringing the two most prominent business names to the same table, ultimately leading to our country’s growth and prosperity. The pact is also an excellent testament to Adani monopoly.
Adani and Ambani’s Journey:
Ambani has always been interested in acquiring control over India’s oil, gas, retail, and telecom sectors, while the Adani Group’s focus has mainly been on expanding India’s infrastructure. The conglomerate has been primarily working on expanding the ports, airports, and mining sectors. These business groups have not crossed each other’s paths frequently, except in the renewable energy business, where both of these groups have announced huge investments.
Adani monopoly indeed exists in the renewable energy sector. In fact, the Adani Group has the vision of becoming the largest renewable energy producer in the world by 2030, while Reliance Industries is currently working on building four gigafactories at Jamnagar in Gujarat. These factories are for solar panels, green hydrogen, batteries, and fuel cells. Gautam Adani is also building three gigafactories to manufacture wind turbines, hydrogen electrolysers, and solar modules.
The Official Tie-Up Between the Business Groups:
In an official statement, Adani Power recently announced that Mahan Energy Limited has entered into a 20-year long-term power-purchase agreement for 500 MW with Reliance Industries Limited under the Captive User Policy defined in the Electricity Rules, 2005. A 600 MW capacity of MEL’s thermal power plant, out of its total operating and upcoming capacity of 2,800 MW will be used as the captive unit for this purpose only. To enjoy the benefits of the Captive User Policy, Reliance Industries will be holding a 26% ownership stake in the unit. The company plans to invest in 5 crore equity shares of MEL. This would amount to INR 50 crores.
MEL, one of the major power generation companies in India, was incorporated on October 19 2005. The total turnovers of MEL as audited for financial years of 2023-2022, 2021-2022, and 2020-2021 were INR 2,730.68 crore, INR 1,393.58 crore and INR 692.03 crore respectively. The investment being made by the company is not a related party transaction. None of the promoters, groups, or group companies are interested in the investment. This total investment is subject to precedents of customary conditions, including receiving the required approvals from MEL. The entire transaction is expected to be completed within two weeks. This is one of the most significant ventures taken up by the Adani Group in recent years. It serves as an excellent milestone for the business group towards increasing its business horizons.
Conclusion:
In the past few days, the Adani Group has taken up multiple initiatives to enhance India’s infrastructure capabilities. This is yet another big step taken by the business group towards expanding its business and making investors aware of the Adani monopoly that exists in the Indian business landscape. In the upcoming years as well, we will get to see the Adani Group become a part of multiple business ventures, each of which will directly help the conglomerate recover from the financial distress that it has been undergoing over the past few months and also build an excellent reputation for itself in this business world.
