The deal, estimated to be valued between Rs 2,400 crore and Rs 3,000 crore, involves Adani Power negotiating with CFM Asset Reconstruction Co to acquire a project associated with Vidarbha Industries Power Ltd.
Adani Power Ltd is in talks to acquire the 600 MW Butibori thermal power project in Nagpur, previously owned by the insolvent Reliance Power Ltd, according to a Mint report.
The deal is projected to be worth between Rs 2,400 crore and Rs 3,000 crore, translating to approximately Rs 4 crore to Rs 5 crore per MW. This acquisition would allow Adani Power, a leading private thermal power producer in India, to capitalize on the growing electricity demand in the country.
The report cites an official stating, “Adani Power is negotiating with CFM Asset Reconstruction Co to purchase the project through Vidarbha Industries Power Ltd. Although the project’s original valuation was around Rs 6,000 crore, production has halted, leading to a reduced valuation. The acquisition aligns with Adani’s strategic goals.”
The Butibori project, managed by Vidarbha Industries Power—a Reliance Power division—currently has CFM ARC as its sole creditor, having bought its loans for Rs 1,265 crore. The official added, “Adani Group plans to fund the entire deal using its internal resources.”
JSW Energy Ltd, led by Sajjan Jindal, had initially shown interest in the project but withdrew due to concerns over its valuation and operational issues.
Previously, Reliance Power used the Butibori plant while operating as a distributor in Mumbai, a role later taken over by Adani Electricity Mumbai Ltd. The power purchase agreement between Vidarbha and Adani expired on December 16, 2019, leading to financial struggles for the Butibori project. Lenders have filed for bankruptcy proceedings against Vidarbha Industries, although insolvency proceedings have not yet begun.
Adani Group is looking to expand its thermal power assets. Recent presentations from the group emphasized the increasing peak power demand and the necessity for reliable thermal power capacity.
Current negotiations reflect a significantly lower valuation for the plant due to both units being non-operational from a coal shortage. This acquisition would enable Adani to integrate the Butibori project with its nearby Tiroda coal-fired power plant, enhancing power generation and supply to Mumbai and surrounding areas. This move aims to strengthen Adani’s competitive edge against rivals Tata Power and MSEDCL. The Tiroda project, with 3.3 GW of coal-based supercritical capacity, is located approximately 125 km from Nagpur on the Bhandara-Gondia state highway. The Butibori project has a long-term Power Purchase Agreement (PPA) with Maharashtra state for 3,085 MW, with potential for expansion if the acquisition goes through.
