RIL Says 'Do Not Read Anything More' As India's Richest Man's Conglomerate Picks Up 26% Stake In Gautam Adani's Thermal Power Unit

After the first collaboration between rival billionaires Mukesh Ambani and Gautam Adani, a Reliance Industries (RIL) spokesperson said it is a commercial transaction and to "not read anything more" into it.

What Happened: India's richest man Ambani's RIL picked up a 26% stake in Adani Power subsidiary, Mahan Energen.

Mahan Energen is a Madhya Pradesh-based power project with an aggregate operating and upcoming power capacity of 2,800 megawatts (MW.)

Reliance has entered into a 20-year agreement with Mahan Energen to secure 500 MW of electricity for captive use. Towards this, Reliance has invested ₹50 crore and picked up a 26% equity stake in the company.

"It's a commercial agreement and it is as per regulations… do not read anything more into the transaction," a senior official at Reliance Industries told Business Line.

See Also: Adani Family Boosts Investment In Ambuja Cements By ₹6,661 Cr, Stake Now At 66.7%

In its exchange filing, RIL said that its investment in Mahan Energen is as per the provisions of Electricity Rules, 2005, which require captive users to invest a proportionate stake in their power supplier's equity.

The Reliance-Adani Power partnership comes at a time when both Ambani and Adani are investing heavily in the renewable energy sector.

While Reliance Industries has a ₹75,000 crore investment plan for its integrated renewable energy ecosystem, Adani is targeting the setup of 45 gigawatts (GW) of renewable energy capacity by 2030.

This week, Adani Green Energy, an Adani Group company, operationalized 955 MW solar power projects in Gujarat and Rajasthan.

Price Action: Adani Power's shares closed 2.99% up at ₹532, while Reliance Industries' shares closed 0.52% lower at ₹2,970.30 on Friday.

Read Next: Mark Mobius Is Bullish On These Three Indian Stocks For Long-Term Growth

Photos courtesy: Flickr