Adani Power to acquire DB Power for enterprise value of Rs 7,017 crore

'Buy to help expand operations in thermal power sector in Chhattisgarh'

Adani Power on Friday said it would acquire DB Power from the Dainik Bhaskar group for an enterprise value of Rs 7,017 crore. 

DB Power owns and operates two 600 mega-watt (Mw) thermal power plants in Chhattisgarh. The initial term of the memorandum of understanding between the two companies will be till October 31, 2022, but can be extended further on mutual agreement, Adani Power said.

Incorporated in October 2006, DB Power has long- and medium-term power purchase agreements (PPAs) for 923.5 Mw of its capacity, backed by fuel supply agreements with Coal India, and has been operating its facilities profitably, Adani Power said.

The turnover of DB Power in the last three financial years was Rs 3,488 crore (FY 2021-22); Rs 2,930 crore (FY 2020-21) and Rs 3,126 crore (FY 2019-20), respectively. Diligent Power, part of the Dainik Bhaskar group, is the holding company of DB Power. 

In its regulatory filing, Adani Power said the acquisition will help the company to expand its offerings and operations in the thermal power sector in Chhattisgarh. The proposed transaction is subject to approval from the Competition Commission of India, it said. 

In Q1FY23, Adani Power reported a 17-fold growth in consolidated profit after tax (PAT) to Rs 4,780 crore compared with Rs 278 crore reported in the corresponding quarter last year.

Revenue climbed to Rs 15,509 crore in the quarter under review, more than double of the Rs 7,213.21 crore reported in Q1 of FY22. Consolidated earnings before interest tax depreciation and amortization (Ebitda) for Q1FY23 came in at Rs 7,506 crore versus Rs 2,292 crore in the year-ago period, a rise of 227 per cent.

Adani Power shares closed at Rs 412.20 apiece, up 3.2 percent on the BSE on Friday. Thus far in the calendar year 2022 (CY22), Adani Power has outperformed the market by zooming over 318 per cent. In comparison, the BSE Sensex was up 1.9 per cent during the period.