RInfra Inks Deal With Adani For Mumbai Power Supply

Joanna Estrada
October 12, 2017

Reliance Infrastructure, controlled by the Anil Ambani group, has entered into a period of exclusivity with Adani Transmission for proposed sale of its integrated business of generation, transmission and distribution of power for Mumbai. "Further announcements will be made at an appropriate stage", Reliance Infra said. Through monetization of its various businesses and arbitration award, RInfra expects its standalone debt levels to reduce substantially to around Rs 10,000 crore by March 2018.

Adani Transmission in December previous year agreed to buy 3,600 circuit kilometre of Western Region System Strengthening from Reliance Infrastructure for Rs 1,000 crore. The scrip opened at Rs 177.5 and has touched a high and low of Rs 193.25 and Rs 174.05 respectively.

The stock had outperformed the market over the past one month till 9 October 2017, advancing 33.36% compared with the Sensex's 0.5% rise.

The large-cap company has equity capital of Rs 1099.81 crore. "If Adani Transmission pays anything above that, it could be seen as negative for the financials of the company as funding the transaction would be hard", said an analyst with a Mumbai-based brokerage on the condition of anonymity.

Mumbai: The stock price of Adani Transmission (ATL) rose sharply on Wednesday, closing almost 5% higher at Rs 203 on BSE, on the news that the company was in talks to buy Reliance Infrastructure's power generation, transmission and distribution businesses in Mumbai.

The proposed transaction is subject to confirmatory diligence, definitive documentation, and customary approvals. Adani Transmission said the proposed transaction will strengthen its footprint in the power transmission sector and mark its foray into distribution.

According to analysts, Reliance Infra's Mumbai distribution business is valued at Rs 10,000-13,000 crore.

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