Reliance Power share price: Anil Ambani-owned stock hits upper circuit. More steam left?

Reliance Power share price was locked at 5% upper circuit on Monday on reports that Gautam Adani Group company Adani Power was in talks to buy Reliance Power’s 600 MW thermal plant. Reliance Power shares spiked 5% to a high of ₹32.81 apiece on the BSE.

Mint on Monday, quoting sources, reported that Gautam Adani Group firm Adani Power was in talks to acquire the 600 MW Butibori thermal power project in Nagpur.

The project is owned by Vidarbha Industries Power, a subsidiary of Anil Ambani’s bankrupt Reliance Power. CFM ARC has acquired all of its loans for ₹1,265 crore and is currently the only lender to the project.

A deal is likely in the range of ₹2,400-3,000 crore, translating to ₹4-5 crore per MW, two people aware of the matter told Mint on the condition of anonymity.

Project value

“Adani Power is negotiating with CFM Asset Reconstruction Co. to acquire the project under Vidarbha Industries Power Ltd. The value of the project, which consists of two power plant units, was earlier around ₹6,000 crore, but currently, the production (power generation) has stopped; so, the valuation has to be lower. The plant fits into Adani's strategy,” one of the two people said.

“The entire deal will be funded through the internal accruals of Adani group,” the person cited above said.

Emails sent to Adani group and CFM ARC remained unanswered.

At 10:05 am, Reliance Power shares were locked at 5% upper circuit ₹32.81 apiece, while Adani Power share price was trading 0.42% higher at ₹700.20 apiece on the BSE.