Reliance Industries Secures 26% Stake in Adani's Power Project in Landmark Deal

24 Dec 2024

In a significant partnership, Mukesh Ambani's Reliance Industries Ltd. (RIL) has secured a 26% stake in Mahan Energen Ltd., a subsidiary of Gautam Adani's Adani Power Ltd. As part of the agreement, RIL will have access to 500 MW of electricity from the Madhya Pradesh-based power plant for its own captive use over the long term.

As per the agreement, RIL will acquire 5 crore equity shares of Mahan Energen Ltd, with a face value of ?10 each, amounting to a total of ?50 crore. This investment ensures RIL complies with the regulatory requirement of holding a minimum 26% stake in a captive power generation company to obtain power for its own use, as stipulated by the Electricity Rules, 2005.

Despite media depictions of rivalry, Ambani and Adani, two billionaires from Gujarat, have largely steered clear of direct competition. Their business interests remain distinct, with Ambani leading in oil, gas, telecom, and retail, while Adani concentrates on infrastructure, ports, and renewable energy. While both have made notable forays into clean energy and announced substantial investments in the sector, their core operations rarely overlap.

Adani aims to become the global leader in renewable energy production by 2030, while Reliance is setting up four giga-factories in Gujarat for solar panels, batteries, green hydrogen, and fuel cells. Similarly, Adani is constructing three gigafactories focused on solar modules, wind turbines, and hydrogen electrolysers.

This collaboration highlights an instance of indirect business intersectionality. In 2022, Adani acquired shares in NDTV, a company that had previously been linked to Reliance. Additionally, Adani's attendance at the pre-wedding event of Ambani's son further suggests a cordial relationship between the two industrial giants.