In a ‘power’ deal, Mukesh Ambani's Reliance Industries will purchase 26% stake in Mahan Energen, a wholly owned subsidiary of Gautam Adani's Adani Power for £5 million 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 600 MW capacity of its Mahan thermal power plant in Madhya Pradesh will be designated as a captive unit in line with 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. 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 theyaim 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.
