Reliance Industries Ltd (RIL) has acquired a 26 per cent stake in Mahan Energen Ltd (MEL), an unit of Adani Power Ltd.
It was in March this year that Reliance and the Gautam Adani group came together in a power purchase deal wherein the former will lift 500 MW from MEL in lieu for a 26 per cent stake.
The arrangement is in line with the Captive User policy under Electricity Rules, 2005 which says that no power plant shall qualify as a captive power plant if at least 26 per cent is held by the captive user(s).
Both RIL and Adani Power said in separate regulatory announcements that following the allotment of shares by MEL, the Mukesh D Ambani led firm will now have a 26 per cent proportionate ownership stake in the captive unit.
“The company has today, upon completion of conditions precedent, subscribed to 5,00,00,000 Class ‘B’ equity shares of face value of ₹10 each of MEL on a par aggregating ₹50 crore,” RIL said.
Adani Power disclosed that a 20-year long-term Power Purchase Agreement (PPA) for 500 MW has been entered with RIL under the captive user policy. It added that one unit of 600 MW capacity of MEL’s Mahan thermal power plant, out of its aggregate operating and upcoming capacity of 2800 MW, was designated as the captive unit for this purpose.
“In order to avail of the benefit under the said policy, RIL has to hold a 26 per cent ownership stake in the captive unit in proportion to the total capacity of the power plant.
“In furtherance of the above, upon completion of all the conditions precedent mentioned under the investment agreement dated March 27, 2024, RIL has subscribed to, and MEL has issued and allotted to it 5,00,00,000 ‘Class B’ equity shares…translating to 26 per cent proportionate ownership stake in the captive unit,’’ Adani Power said.