In a historic collaboration, Mukesh Ambani’s Reliance Industries Limited (RIL) has acquired a 26% stake in Mahan Energen Ltd, a subsidiary of Gautam Adani’s Adani Power Ltd. This deal includes a long-term agreement for RIL to use 500 MW of electricity generated by the Madhya Pradesh-based power plant for its captive purposes.
Under the agreement, RIL will purchase 5 crore equity shares of Mahan Energen Ltd at a face value of ₹10 each, totaling ₹50 crore. The investment ensures RIL meets the regulatory requirements of holding at least a 26% stake in a captive power generating company to access power for self-use, as mandated by the Electricity Rules, 2005.
Despite media portrayals of rivalry, Ambani and Adani, both Gujarat-origin billionaires, have strategically avoided direct competition. Their business interests largely differ, with Ambani dominating oil, gas, telecom, and retail sectors, while Adani focuses on infrastructure, ports, and renewable energy. The duo occasionally overlaps in clean energy, with both announcing significant investments in the sector.
Adani aims to become the world’s largest renewable energy producer by 2030, while Reliance is developing four gigafactories in Gujarat for solar panels, batteries, green hydrogen, and fuel cells. Similarly, Adani is constructing three giga factories for solar modules, wind turbines, and hydrogen electrolysers.
This collaboration follows a precedent of indirect business intersections. In 2022, Adani acquired NDTV shares previously linked to Reliance. Adani also attended pre-wedding celebrations of Ambani’s son, signaling cordial relations between the industrial giants.
Mahan Energen Ltd, with a 600 MW thermal power unit designated as the captive plant for this agreement, is part of a larger 2,800 MW capacity project. RIL’s investment will secure long-term power supplies under a 20-year agreement. However, the precise application of this power by RIL remains unclear, as the company already operates captive power units for its refining and petrochemical complexes in Gujarat and Maharashtra.
The transaction, formalized through an agreement on March 27, 2024, is subject to regulatory approvals and standard closing conditions. Completion is anticipated within two weeks of fulfilling these conditions.
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Mahan Energen Ltd reported turnovers of ₹2,730.68 crore, ₹1,393.59 crore, and ₹692.03 crore for the financial years 2022-23, 2021-22, and 2020-21, respectively, highlighting its robust financial performance. This collaboration marks a significant milestone in Indian corporate synergy and energy sector innovation.