Adani Group eyes Indiabulls Power to buy Amravati Thermal Project.

Times of India reported that the Adani Group is in advanced stages of negotiations with Indiabulls Power to buy out its 1,350 MW Amravati Thermal Power Project.

Earlier this month, the promoters of Indiabulls Group had split the empire with chairman Sameer Gehlaut getting control of housing finance, securities and real estate businesses while directors Rajiv Rattan and Saurabh Mittal taking over power and infrastructure.

The source said that 'Talks are on and the deal size is expected to be between INR 7,000 crore and INR 9,000 crore. While Indiabulls Power is expecting INR 9,000 crore, the Adani Group is willing to shell out INR 7,000 crore for the Amravati unit.'

What makes Amravati power project attractive for the Gautam Adani-led group is that its phase one has been completed with two operational units of 270 MW each. The project has received 1,350 acres of land by MIDC in Additional Amravati Industrial Area and coal linkages have been tied up with South Eastern Coalfields, Western Coalfields and Mahanadi Coalfields. The project has also received all required approvals from statutory authorities.

Investment adviser S P Tulsian believes that Indiabulls will eventually exit power business as it has only two projects, one in Amravati and the other in Nashik.

It said that 'This is a good buy for Adani given that the government has assured coal linkages for all power plants operational by March 31, 2015. The Amravati first phase is complete and the second phase may be completed before the deadline. However, I don't think Adani will pay anything beyond INR 7,500 crore.'

The deal is likely to further consolidate Adani Group's position as India's largest private sector power producer with a capacity of about 10,000 MW. The group, with a capacity of 8,620 MW, plans to more than double its generation to over 20,000 MW in the next five years.

The move comes on the heels of India's biggest power-infrastructure deal outside telecom, with Reliance Power pipping the Adani Group and JSW to acquire Jaypee Group's hydel power projects last week for around INR 12,000 crore.


STEELGURU