Adani Power Secures CoC Approval for VIPL Acquisition

24 Feb 2025 , 04:26 PM

Adani Power Ltd received approval from the Committee of Creditors (CoC) for its resolution plan to acquire Vidarbha Industries Power Ltd (VIPL), a subsidiary of Reliance Power. The Resolution Professional (RP) has issued a Letter of Intent (LOI) on 24 February to Adani Power confirming that its resolution plan has been approved.

The acquisition hinges on the rehabilitation of VIPL, which runs a 600 MW (2×300 MW) thermal power plant at the MIDC Industrial Area, Butibori at Nagpur in Maharashtra.

The implementation of the resolution plan is subject to the terms of the LOI and the receipt of necessary approvals from the National Company Law Tribunal (NCLT), Mumbai and other regulatory authorities, courts or tribunals, where required under Indian laws.

This acquisition is in line with Adani power‘s strategy to cement its position in the sector through enhancing thermal power generation capacity. The deal refers to Adani Power being in talks to buy Reliance Power’s Butibori 600 MW thermal project, previously the value of the deal was estimated to be between ₹2,400 crore and ₹3,000 crore, earlier reports had said.

In September 2024, Reliance Power had discharged its payment obligation in its capacity as guarantor of VIPL by paying a total amount of ₹3,872.04 crore. Adani Power’s December quarter net profit increased 7.4% year-on-year to ₹2,940 crore from ₹2,737 crore. The quarter saw a 5.2% year-on-year rise in revenue, which stood at ₹13,671.2 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew 8% y-o-y to ₹5,023 crore. The EBITDA margin increased to 36.7% from 35.8% last year.

The board of the company approved an increase in the ceiling for raising funds under the Non-Convertible Debentures (NCDs) issuance limit from ₹5,500 crore to ₹11,000 crore. The board also sanctioned a ₹5,000-crore fund-raise via the Qualified Institutional Placement (QIP) route.