Adani Power Ltd, India’s largest private thermal power producer, is reportedly in advanced talks to acquire the 600-megawatt Butibori thermal power project in Nagpur, which was previously owned by Anil Ambani‘s bankrupt Reliance Power.

What Happened: The deal is estimated to be valued between ₹2,400 crore-₹3,000 crore, Mint said in a report. This acquisition would enable Adani Power to leverage the increasing electricity demand in the country.

The Butibori project is currently held by Vidarbha Industries Power, a subsidiary of Reliance Power. CFM ARC, which purchased all of its loans for ₹1,265 crore, is the sole lender to the project.

The acquisition aligns with Adani’s strategy to merge its coal-based power plant in Tiroda with the Butibori project, restart power generation and supply electricity to Mumbai and its neighbouring regions.

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The Adani Group reportedly intends to finance the entire deal through internal accruals. As stated in a recent presentation, the group is eager to expand its thermal power capacity in response to the growing peak power demand in the country.

JSW Energy had previously expressed interest in the project, but later retracted due to valuation and operational issues. The Butibori project has been facing a cash crunch since the Vidarbha-Adani power purchase agreement concluded in December 2019.

Price Action: Adani Power was trading 0.11% to ₹698.20, whereas Reliance Power soared 5% to ₹32.79 on Monday.

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