In a significant boost to its thermal power portfolio, Adani Power Ltd (APL) has successfully acquired the 600-megawatt Vidarbha Industries Power Ltd (VIPL) thermal power plant in Maharashtra for an estimated Rs 4,000 crore. The acquisition, executed through a resolution plan approved by the National Company Law Tribunal (NCLT), strengthens Adani Power’s operational footprint in western India and demonstrates its aggressive inorganic growth strategy amid India’s rising energy demand.
About The Acquisition
The VIPL plant, located at Butibori near Nagpur, was previously owned by Reliance Power. The acquisition was finalised under the Insolvency and Bankruptcy Code (IBC) after VIPL defaulted on payments and was admitted to insolvency proceedings. Adani Power’s resolution plan received approval from the Mumbai bench of NCLT, enabling the company to take over the asset by settling creditor claims.
Key Details Of The Deal
| Particulars | Details |
|---|---|
| Acquirer | Adani Power Ltd |
| Seller | Reliance Power’s subsidiary, VIPL |
| Capacity | 600 MW (2 x 300 MW units) |
| Location | Butibori, Nagpur, Maharashtra |
| Transaction Value | Approx. Rs 4,000 crore |
| Mode Of Acquisition | Approved resolution plan under IBC |
| Key Benefit | Strengthens Adani’s presence in Maharashtra and secures power purchase agreements (PPAs) with MSEDCL |
Why Is This Acquisition Important For Adani Power?
- Strategic Location: Butibori is an industrial hub with robust power demand, ensuring high plant load factor (PLF) opportunities.
- Existing PPAs: The plant has PPAs with Maharashtra State Electricity Distribution Company Ltd (MSEDCL) for 25 years, ensuring steady revenue.
- Operational Asset: Unlike greenfield projects requiring long gestation, VIPL is an existing operational asset that can be integrated immediately.
- Portfolio Expansion: The acquisition increases Adani Power’s total installed thermal capacity to approximately 15,610 MW.
Adani Power’s Current Thermal Portfolio After VIPL Addition
| Plant | Location | Capacity (MW) |
|---|---|---|
| Mundra | Gujarat | 4,620 |
| Tiroda | Maharashtra | 3,300 |
| Kawai | Rajasthan | 1,320 |
| Udupi | Karnataka | 1,200 |
| Raipur | Chhattisgarh | 1,370 |
| Raigarh | Chhattisgarh | 600 |
| Godda (under commissioning) | Jharkhand | 1,600 |
| VIPL (newly acquired) | Maharashtra | 600 |
| Total | – | 15,610 |
The addition of VIPL enhances Adani’s capacity in Maharashtra to nearly 3,900 MW, making it a leading private thermal power producer in the state.
Benefits For Maharashtra Power Sector
The acquisition ensures continued supply to MSEDCL, providing reliable electricity to industrial, agricultural, and domestic consumers in Maharashtra. VIPL had faced operational issues due to financial constraints under Reliance Power, and Adani’s takeover is expected to revive full capacity utilisation, critical for managing peak summer demand.
Financial Analysts’ Take On The Acquisition
Market analysts see the acquisition as value accretive for Adani Power. ICICI Securities, in its recent sector note, stated:
“Adani Power’s strategy of acquiring stressed assets under IBC at attractive valuations augments its generation portfolio without the execution risk of greenfield projects. VIPL’s long-term PPA ensures stable returns.”
Challenges And Operational Plans Ahead
While the acquisition is positive, experts caution about certain operational considerations:
- Environmental Compliance: Ensuring compliance with updated emission norms, including flue gas desulphurisation (FGD) installation.
- Fuel Supply: Securing consistent coal linkage to maintain optimal PLF and avoid reliance on volatile imported coal prices.
- Integration: Smooth integration into Adani’s operational and management systems to optimise O&M costs.
Reliance Power’s Debt Resolution Through VIPL Sale
Reliance Power had pledged VIPL as a part of its debt resolution strategy, aiming to reduce its debt burden significantly. The sale proceeds will be used to settle outstanding dues to lenders, including IDBI Bank-led consortium, thus strengthening Reliance Power’s balance sheet for future restructuring.
| Reliance Power – Financial Snapshot Pre-Sale |
|—|—|
| Total Debt (FY24) | Approx. Rs 20,000 crore |
| VIPL Sale Proceeds | Rs 4,000 crore |
| Impact | Significant reduction in consolidated debt and interest outgo |
Adani Power’s Recent Strategic Acquisitions Under IBC
| Asset | Capacity | Acquisition Year | Transaction Value |
|---|---|---|---|
| Korba West Power (SKS Power) | 600 MW | 2019 | Rs 4,250 crore |
| Raigarh Energy | 600 MW | 2019 | Rs 3,500 crore |
| GMR Chhattisgarh Energy | 1,370 MW | 2020 | Rs 3,530 crore |
| Essar Power Mahan | 1,200 MW | 2022 | Rs 3,800 crore |
| VIPL (current) | 600 MW | 2025 | Rs 4,000 crore |
This inorganic expansion strategy has helped Adani Power emerge as India’s largest private thermal power generator while ensuring quick capacity addition without construction delays.
Industry Reactions
Power sector experts welcomed the acquisition:
- “This ensures VIPL’s capacity is revived quickly, benefiting Maharashtra’s grid stability.”
- “Adani’s operational efficiency and financial muscle will ensure smooth running of the plant.”
- “For Reliance Power, this sale is crucial to deleverage and restructure future operations.”
Future Outlook For Adani Power
With India’s peak power demand projected to cross 250 GW by 2030, Adani Power is likely to continue its acquisition-led growth, while also exploring clean coal technologies and hybrid integration of renewables at existing thermal sites to align with national decarbonisation goals.
Conclusion
The Rs 4,000 crore acquisition of VIPL by Adani Power underscores its aggressive expansion approach to strengthen its leadership in the Indian thermal power market. It also offers relief to Reliance Power’s debt-laden balance sheet, marking another success story of India’s IBC framework facilitating resolution of stressed assets. As India’s energy demand rises, Adani Power’s operational and financial strategies are expected to play a crucial role in ensuring reliable electricity supply while maintaining competitive tariffs for consumers.
Disclaimer
This news article is based on company announcements, regulatory filings, analyst reports, and public domain information for general business news dissemination. Readers are advised to consult official documents and financial advisors before making investment decisions.
