India (Commonwealth) _ In a landmark partnership, Gautam Adani‘s Adani Power Ltd. subsidiary Mahan Energen Ltd. has seen a 26% acquisition by Mukesh Ambani‘s Reliance Industries Limited (RIL). A long-term contract for RIL to use 500 MW of power produced by the Madhya Pradesh-based power plant for its captive operations is part of this agreement. The agreement could make it a highly significant player among Commonwealth nations.
As per the agreement, RIL would pay ₹50 crore, or 5 crore equity shares, to Mahan Energen Ltd. at a face value of ₹10 apiece. The investment makes sure that RIL meets the legal requirement of owning at least 26% of a captive power generation company in order to get electricity for personal use, as stated in the 2005 Electricity Rules.
Ambani and Adani, both billionaires of Gujarati descent, have purposefully avoided direct competition, despite media depictions of antagonism. Adani concentrates on infrastructure, ports, and renewable energy, whereas Ambani dominates the oil, gas, telecom, and retail industries. Their commercial interests are very different. Both have announced large investments in sustainable energy; therefore, there are times when the two overlap.
By 2030, Adani wants to dominate the global market for renewable energy, while Reliance is building four gigafactories in Gujarat for fuel cells, solar panels, batteries, and green hydrogen. In the same vein, Adani is building three massive plants for hydrogen electrolysers, wind turbines, and solar modules.
Indirect commercial intersections have preceded this collaboration. Adani purchased NDTV shares that were formerly associated with Reliance in 2022. Adani’s attendance at Ambani’s son’s pre-wedding festivities further demonstrated the friendly ties between the two titans of industry.
A 600 MW thermal power unit owned by Mahan Energen Ltd. is the captive plant for this deal; it is a component of a bigger project with a capacity of 2,800 MW. Through a 20-year contract, RIL’s investment will guarantee long-term electricity supplies. Since RIL currently runs captive power units for its petrochemical and refining complexes in Gujarat and Maharashtra, it is unclear exactly how the business will use this power.
Formalized through an agreement on March 27, 2024, the deal is contingent upon standard closing conditions and regulatory approvals. It is expected to be finished in two weeks when these requirements are met.
Mahan Energen Ltd’s strong financial success was demonstrated by its estimated turnovers of ₹2,730.68 crore, ₹1,393.59 crore, and ₹692.03 crore for the fiscal years 2022–2023, 2021–2022, and 2020–2021, respectively. An important turning point in Indian corporate synergy and energy sector innovation is this partnership.
Is the Ambani and Adani rivalry ending?
Two of India’s most powerful industrialists, Ambani and Adani, have maintained mostly complimentary economic interests despite constant media rumors of conflict. Adani’s focus is on ports, infrastructure, and renewable energy, whereas Ambani’s conglomerate includes retail, telecom, gas, and oil. Nonetheless, both have made noteworthy pledges to clean energy projects.
As a strategic step to guarantee a long-term power supply under a 20-year deal, RIL acquired the 600 MW Mahan Energen thermal power station, which is a component of a bigger 2,800 MW project. The precise use of this power is still unknown, but RIL’s refineries and petrochemical facilities in Gujarat and Maharashtra are probably going to gain from it.
Having turnovers of ₹2,730.68 crore, ₹1,393.59 crore, and ₹692.03 crore during the last three fiscal years, Mahan Energen showed strong financial performance, demonstrating its stability.
The fulfillment of this agreement, which was signed on March 27, 2024, is anticipated in two weeks and is contingent upon regulatory clearances and usual conditions. This historic partnership between RIL and Adani Power highlights a critical juncture of innovation and synergy in India’s energy industry.
Reliance Industries’ chairman and managing director is Mukesh Dhirubhai Ambani. He is the ninth richest person in the world and the richest person in Asia.
Ambani’s net worth of $119.5 billion placed him first on Forbes‘ list of the 100 richest tycoons in India in October 2024.
Gautam Shantilal Adani is the founder and chairman of the Adani Group, a multinational corporation involved in port operations and development in India. With a net worth of $60 billion as of November 21, 2024, Adani is the second richest person in Asia and the 25th richest person globally. Time magazine listed him as one of the 100 most important persons in the world in 2022.
