Adani Power adds Reliance Power’s former unit to its string to acquisitions

The National Company Law Tribunal on 18 June approved Adani Power’s  ₹4,000 crore resolution plan to acquire VIPL following a majority nod in February by the distressed company’s committee of creditors.

Adani Power aims to increase its 17.55 GW of power-generating capacity—including thermal plants across states and a 40 MW solar project in Gujarat—to 30.67 GW by 2030, making it the largest private sector capacity expansion in the country.

With its latest acquisition, Adani Power will gain control of VIPL’s 600 MW thermal power plant in Butibori, Nagpur, comprising two 300 MW units. The plant has a long-term power purchase agreement with the Maharashtra government for 308.5 MW, ensuring stable cash flows and potential for future scale-up.

The VIPL deal follows Adani’s recent acquisitions of Dahanu Power ( ₹815 crore), Lanco Amarkantak Power, and Coastal Energen ( ₹3,330.88 crore), underscoring the group’s strategy to drive growth.

On Thursday, 19 June, Adani Power shares fell 3.2% to ₹533.20 each on NSE, while the Nifty 50 held steady, shedding just 18.80 points amid geopolitical tensions because of the escalating Israel-Iran conflict.

Also read | <a style="text-decoration:none;" target="_blank" href="https://www.livemint.com/companies/adani-group-2-5-trillion-five-years-capex-11749646088165.html" data-vars-anchor-text="Adani Group to raise ₹2.5 trillion over five years to fund capex”>Adani Group to raise ₹2.5 trillion over five years to fund capex

VIPL’s insolvency

Vidarbha Industries Power was admitted into insolvency in September 2024 after CFM Asset Reconstruction moved the tribunal under the Insolvency and Bankruptcy Code (IBC). 

On 24 February this year, Adani Power informed stock exchanges that VIPL’s lenders had approved its revival plan, subject to the terms of the letter of intent and necessary regulatory approvals.

Adani Power had emerged as the successful resolution applicant after a competitive process that attracted bids from several major players, including Capri Global Holdings, CESC Ltd, Hindustan Thermal Projects, Jindal Power, JSW Energy, NTPC Ltd, Orissa Metaliks, Vedanta Ltd, and Shriniwas Spintex Industries.

Under the approved plan, Adani Power will pay ₹4,000 crore against total admitted liabilities of ₹6,753 crore.

The Adani entity has been directed to complete the payment within the stipulated timeframe. “The Resolution Applicant is directed to make payment of the entire Resolution Plan amount within the time period stipulated under the Resolution Plan, failing which the entire amount paid shall stand forfeited,” a Mumbai bench of the NCLT said in its 18 June order.

As per the plan, the funding will be arranged through internal accruals or financing by eligible affiliates, with the flexibility to raise capital via equity, debt, preference shares, or external commercial borrowings.

Also read | Adani, Reliance among participants in NPCIL’s small nuclear reactor project

Reliance Power’s exit

VIPL was originally established as a special-purpose vehicle by Reliance Power to develop a 600 MW thermal power plant in Butibori, Nagpur, under a concession from the Maharashtra Industrial Development Corporation. The project was later converted into an independent power project.

In September 2024, Reliance Power announced that VIPL was no longer its subsidiary after settling ₹3,872 crore in corporate guarantees extended on its behalf. 

As part of the settlement with CFM Asset Reconstruction, all associated obligations were released and 100% of VIPL’s shares were pledged in favour of CFM. VIPL had defaulted on loans from Axis Bank and State Bank of India, which were later acquired by CFM ARC.

Also read | Is the Israel-Iran war a billion-dollar threat to Adani Ports & SEZ?