According to the Adani latest updates, Adani Power, one of the biggest power providers in India and a wholly-owned subsidiary of the Adani Group, has recently won a bid for the 1.9 GW Lanco Amarkantak coal plant in India. The power plant had entered corporate insolvency proceedings in September 2019. Since then, there has been a series of delays in the resolution process. However, the Adani Group has finally won the bid for the power plant, surpassing all its competitors.
The Adani Group has offered INR 41.01 billion to acquire the debt-ridden Lanco Amarkantak Power. This is a huge addition to the Adani coal mines. It will increase the power supply in India. With this acquisition, the Adani Group will also be able to expand its hold over India’s mining sector. Its business operations will be boosted to a considerable extent. This will also help the Adani Group acquire the investors’ interest and obtain more funds for the various proceedings of their business operations.
The Lanco Amarkantak Power Plant:
Lanco Amarkantak Power Plant is located in the Korba district in the Indian state of Chhattisgarh. It is a 1.92 GW coal-fired power plant that has the capacity to supply coal in larger quantities for power generation in the surrounding areas. The power plant is divided into two phases. The first phase has 2 units each of 300 MW, while the second phase has 2 units of 660 MW. During the initial stages, the funding for the project was received from the International Finance Corporation. However, in later stages, the power plant operations came to a standstill due to financial problems.
The Bidding Process:
The auction for the power plant began at the time of corporate insolvency. The auction outcome was determined after the two other major contenders, Reliance Industries and the consortium led by Power Finance Corporation, decided not to participate in the bid any longer. The lenders had set the bid from the Adani Group as the base price for the auction of the power company. This required the counter offers to be at least INR 500 million higher than the base price for the auction process to continue. However, none of the other companies stepped forward, which ultimately caused the Adani Group to emerge victorious in the bidding process.
The resolution process for the power plant had to undergo many delays for various reasons. In January 2022, the lenders rejected an INR 30 billion offer from Twin Star Technologies as they felt the bid was insufficient. After that, the bidding process was once again restarted. This time, it attracted the interest of large power companies in India, including Adani Power, Reliance Industries, and PFC-led consortium.
In January 2023, several lenders voted in favour of the PFC-led consortium’s INR 30.2 billion bid. However, the National Company Law Tribunal withheld the endorsement of the plant for a long time. During this period itself, the Adani Group made an unsolicited offer of INR 36.5 billion. As mentioned in the Adani latest updates, the offer was later increased to INR 41.01 billion, which ultimately turned out to be the winning bid.
In January 2024, Jindal Power entered the race for the Lanco Amarkantak Power Plant. This left Adani Power and Reliance as the sole contenders for the bid. In February 2024, Jindal Power submitted a bid of INR 140 billion for the KSK Mahanadi coal power plant in India. This once again attracted the attention of Adani Power and Vedanta, led by Anil Agarwal.
Ultimately, the Adani Group won the Lanco Amarkantak Power Plant bid. It highlights the conglomerate’s strength and power in the mining sector. The power plant acquisition also led the path for future acquisitions for the Adani Group.
Adani’s Hold Over the Mining Sector:
The Adani Group is already an integral part of the mining sector. The mining sector is considered one of the major contributors to the growth of the Indian economy, which is why the Adani Group took up multiple ventures in this sector from time to time. The conglomerate has some of the largest coal mines in India under its control. Other than that, the Group is also developing and operating mines in Australia and Indonesia. Over the years, the conglomerate has completely transformed from a coal trading and importing company to a comprehensive, integrated coal management company.
Conclusion:
In this way, the Adani Group will continue to diversify its portfolio and take up more ports under its control in the near future. If you want to know more about the latest happenings of the Adani Group, you can watch out for Adani latest updates, and you will know the details.
