Reliance Acquires 26% Stake in Adani's Power Project, Uniting Ambani and Adani

Reliance Industries, led by Mukesh Ambani, and Gautam Adani's Adani Power Ltd have forged a groundbreaking partnership with Reliance securing a 26% stake in Adani's Madhya Pradesh power project. This unprecedented collaboration marks the first joint venture between the two rival billionaires, who have long dominated India's business landscape.

Under the terms of the agreement, Reliance will acquire 5 crore equity shares in Mahan Energen Ltd, a subsidiary of Adani Power Ltd, valued at ₹50 crore. Additionally, Reliance will utilize 500 MW of electricity generated by the power project for captive use, as detailed in separate filings made by both companies to stock exchanges.

Despite being often portrayed as adversaries in media narratives, Ambani and Adani have managed to ascend to the pinnacle of Asia's wealth rankings, with their business empires encompassing diverse sectors ranging from oil and gas to retail, telecom, infrastructure, and clean energy.

Adani's ambitious goal to become the world's largest renewable energy producer by 2030 aligns with Reliance's own aspirations in the clean energy sector, exemplified by its plans to establish four gigafactories in Gujarat for manufacturing solar panels, batteries, green hydrogen, and fuel cells.

The collaboration between the two conglomerates extends beyond the energy sector. Adani's participation in Reliance's pre-wedding celebrations for Ambani's youngest son and the acquisition of a stake in news broadcaster NDTV by Adani from a firm previously linked to Ambani exemplify the cordial relationship between the two business magnates.

The agreement between Reliance and Adani for the Madhya Pradesh power project entails a 20-year power purchase agreement (PPA) for 500 MW under the captive user policy. This move underscores Reliance's strategic positioning in the energy sector and its commitment to sustainable growth.

While specifics regarding Reliance's utilization of the electricity from the project remain undisclosed, the investment agreement between the two entities is slated to be completed within two weeks, subject to customary closing conditions and regulatory approvals.

HBL