RInfra sells Mumbai power biz to Adanis for Rs 18.8k cr

Reliance Infrastructure on Thursday signed an agreement to sell its Mumbai power business to Adani Transmission for a total consideration of Rs 18,800 crore.

Reliance Infrastructure (RInfra) announced the signing of a Definitive Binding Agreement with Adani Transmission (ATL) for 100% stake sale of its Mumbai power business, which includes integrated business of generation, transmission and distribution of power, Reliance Infrastructure said in a BSE filing on Thursday.

According to the statement, the deal value is at Rs 13,251 crore. This comprises business valued at Rs 12,101 crore and regulatory assets approved so far of Rs 1,150 crore.

In addition, it said, regulatory assets under approval estimated at Rs 5,000 crore and net working capital on closing pegged at Rs 550 crore will flow directly to RInfra.

The company said the total consideration is estimated at Rs 18,800 crore.

RInfra will utilise the proceeds of this transformative transaction entirely to reduce its debt, becoming debt free and garnering up to Rs 3,000 crore as cash surplus.

Gautam Adani, Chairman of the Adani Group, said:  "The acquisition marks our foray into the distribution sector in India. We see distribution as the next sunrise sector as India embarks on its mission to achieve 24x7 power for all."

He further said, "We see a massive growth opportunity and will look at both organic and inorganic opportunities to build a market leading distribution company. With this acquisition, Adani Transmission will enjoy benefit of scale and of being an integrated distribution and transmission business in India."

The company claimed that this is the largest ever debt reduction exercise by any corporate, saying this monetisation is a major step in RInfra's deleveraging strategy for future growth.

Reliance Infrastructure's Mumbai Power business, known as Reliance Energy, is India's largest private integrated power utility, distributing power to nearly three million residential, industrial and commercial consumers in suburbs of Mumbai covering 400 sq km.

It caters to a peak demand of over 1,800 mw, with annual revenues of Rs 7,500 crore with stable cash flows.

Going forward, RInfra will focus on upcoming opportunities in asset-light EPC and Defence businesses, it added.

The proposed transaction is subject to customary approvals.