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March 29, 2024

Reliance Industries Acquires 26% Stake in Adani Power Project: Uniting Billionaire Rivals for Clean Energy Future

In a landmark move fostering collaboration between two of India’s most influential business magnates, Mukesh Ambani’s Reliance Industries Limited (RIL) has acquired a significant 26% stake in a Madhya Pradesh power project owned by Gautam Adani’s Adani Power Limited. This strategic partnership signifies a pivotal step towards leveraging resources for a sustainable energy future while bridging competitive divides.

The agreement entails Reliance acquiring 5 crore equity shares in Mahan Energen Ltd (MEL), a wholly-owned subsidiary of Adani Power Ltd, at face value Rs 10 each, amounting to Rs 50 crore. Additionally, Reliance will utilize 500 MW of electricity generated by the power plants for captive use, as disclosed in separate filings to the stock exchange by both entities.

Despite being portrayed as rivals by media and commentators, Mukesh Ambani and Gautam Adani have consistently navigated parallel paths towards the pinnacle of Asia’s wealth ladder. While Ambani’s business empire spans diverse sectors such as oil, gas, retail, and telecom, Adani’s focus remains on infrastructure development encompassing sea ports, airports, coal, and mining.

Significantly, both conglomerates have converged in the domain of clean energy, heralding multi-billion investments. Adani aims to establish itself as the world’s largest renewable energy producer by 2030, while Reliance embarks on constructing four gigafactories in Jamnagar, Gujarat, dedicated to solar panels, batteries, green hydrogen, and fuel cells. Concurrently, Adani is progressing with three giga factories for manufacturing solar modules, wind turbines, and hydrogen electrolysers.

The anticipated clash between the two tycoons was averted when Adani Group opted for spectrum acquisition in the 26 GHz band, distinct from Ambani’s spectrum pursuits for 5G services. Furthermore, instances of collaboration, rather than competition, have surfaced, exemplified by Adani’s acquisition of a stake in NDTV from a firm with previous ties to Ambani, and Adani’s participation in the pre-wedding festivities of Ambani’s son.

The joint venture between Reliance and Adani signifies a paradigm shift in the Indian corporate landscape, setting the stage for exclusive arrangements in power procurement. This collaboration not only underscores the potential for mutual growth but also exemplifies the convergence of interests towards a sustainable energy ecosystem.

While the specific utilization of MEL’s power by Reliance remains undisclosed, given its existing captive units in Gujarat and Maharashtra, and coal-bed methane extractions in Madhya Pradesh, the partnership holds promise for bolstering Reliance’s energy portfolio.

Both Adani Power and Reliance Industries have confirmed the signing of an investment agreement, subject to customary closing conditions and regulatory approvals. The anticipated completion of the transaction within two weeks underscores the expeditious nature of this groundbreaking collaboration.

In conclusion, the Reliance-Adani collaboration marks a pivotal moment in India’s corporate landscape, transcending traditional rivalries in favor of collective action towards sustainable energy solutions. As the world grapples with pressing environmental challenges, such alliances between industry giants underscore the imperative of collaborative efforts in driving the transition towards a cleaner, greener future.

Jhumpa Lahiri

Jhumpa Lahiri

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