Mukesh Ambani Makes His First Investment In Adani Group, Picks Up Rs 50 Crore Stake In Adani Power

For the first time ever, India's richest person Mukesh Ambani's Reliance Industries has invested in India's second richest person Gautam Adani-led Adani group. Earlier this month, Adani had attended the pre-wedding festivities of Mukesh's younger son Anant, in Jamnagar.

Mukesh Ambani Makes His First Investment In Adani Group

mukesh ambani reliance invest adani power/rediff

Ambani's Reliance has picked up a 26% stake in a Madhya Pradesh power project of Gautam Adani, and signed a pact to use the plants' 500 MW of electricity for captive use.

According to separate stock exchange filings from the two companies, Reliance will acquire 5 crore equity shares of face value Rs 10 at par (Rs 50 crore) in Mahan Energen Ltd, a wholly owned subsidiary of Adani Power Ltd, and will use 500 MW of generation capacity for captive use.

Big Steps Being Taken By Adani Group In Different Sectors

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Adani's focus on infrastructure, which includes coal, mining, sea ports, and airports, and Ambani's interests in oil and gas, retail, and telecommunications, meant that the two rarely crossed paths outside of the clean energy sector, where the two have announced multibillion dollar investments.

By 2030, Adani hopes to overtake all other renewable energy producers in the world, while Reliance is constructing four gigafactories in Jamnagar, Gujarat, one for fuel cells, batteries, solar panels, and green hydrogen.

Adani is also constructing three gigafactories to produce hydrogen electrolysers, wind turbines, and solar modules.

When Adani Group applied to take part in an auction of spectrum, or airwaves, capable of carrying fifth generation (5G) data and voice services, a conflict was also foreseen. Adani, in contrast to Ambani, purchased 400 MHz of spectrum in the 26 GHz band, which is not intended for use by public networks.

Conversely, the two have not been at all rivals. The acquisition was made possible in 2022 when a company with previous ties to Ambani sold Adani a portion of its ownership in the news channel NDTV.

Also Read: From Adanis To Ambanis-Here's The List Of India's Richest Siblings

Net Worth Of Mukesh Ambani & Gautam Adani

mukesh ambani/getty

Ambani and Adani are currently the two richest men of India. Mukesh Ambani is both India as well as Asia¡¯s richest person, with a net worth of $116.67 billion, whereas Gautam Adani has a net worth of $81 billion (as per Forbes) currently.

Statements Issued By Adani Group & Reliance

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"Mahan Energen Ltd (MEL), wholly owned subsidiary of Adani Power Ltd (APL), has entered into a 20-year long-term power purchase agreement (PPA) for 500 MW with Reliance Industries Ltd (RIL), under the captive user policy as defined under the Electricity Rules, 2005," Adani Power said in the filing.

Out of the 2,800 MW total operating and future capacity of MEL's Mahan thermal power plant, one unit with a 600 MW capacity will be designated as the captive unit for this purpose.

"In order to avail the benefit of this 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. It will accordingly invest in 5 crore equity shares of MEL, aggregating to Rs 50 crore for the proportionate ownership stake," the filing said.

"This development brings between two corporates an exclusive arrangement for 500 MW of power purchase by Reliance Industries on a long-term basis."

"APL, MEL, and RIL have signed an investment agreement on 27th March 2024 at 7:00 pm. Closing of the transaction is subject to customary closing conditions including receipt of requisite approvals," Adani Power said.

Reliance in the filing made a similar disclosure, adding, "MEL, a company engaged in generation and supply of power, was incorporated on October 19, 2005. The turnover of MEL, as per its audited standalone financial statement, for financial years 2022-23, 2021-22 and 2020-21 was Rs 2,730.68 crore, Rs 1,393.59 crore and Rs 692.03 crore, respectively."

"The investment is subject to customary conditions precedent including receipt of requisite approvals by MEL and is expected to be completed within 2 weeks of receipt of completion of conditions precedent and receipt of such approvals by MEL," it added.

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