MUMBAI:- Adani Power's planned Rs,017- crore accession of DB Power collapsed on Wednesday as the deadline to complete the sale expired.
The development comes as Gautam Adani's empire reviews capital expenditure plans in the wake of a massive sell-off of his companies' shares, touched off by a cutting report by the US- grounded Hindenburg Research on January 24. West Bengal News Today
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Adani Power had inked a purchase agreement for DB Power on August 18, 2022, and planned to conclude the deal by October 31, 2022. The deadline was constantly extended. DB Power owns a,200- megawatt coal-fired power factory in Janjgir Champa, Chhattisgarh, and its enterprise value including debt was estimated at Rs,017 crores.
The planned shot by Adani Power to acquire DB Power, which fell through on Wednesday, had been approved by India's competition controller On September 29, 2022. still, the deadline to complete the sale was extended four times, with the final ending date as February 15, 2023. On Wednesday, Adani Power informed stock exchanges that the ending date( long stop date in M&A parlance) to complete the DB Power accession had" expired".
The collapse of the sale is a reversal of the Adani Group, which has been aggressively expanding its presence across the country. The DB deal would have further solidified Adani's position as India's largest private sector thermal power patron and would have given a strong presence in one of the leading power-generating and consuming belts.
When the DB deal was blazoned in 2022, it was Adani's second biggest M&A in the electricity sector after SB Energy India for which he'd shelled out some Rs,000 crores in 2021.
The rearmost development shows how the apples-to-field empire is prioritizing its fiscal health over aggressive growth. It's strengthening its balance distance by retiring debt, recovering pledged shares, and conserving cash as it attempts to calm investors scarified by Hindenburg's report on its business practices.
Adani Power, with 13.6 GW capacity across seven thermal means in five countries and a 40MW solar asset, had a debt of Rs,031 crores as on September 30, 2022.
DB Power is the alternate deal that the group had to call off since the Hindenburg report. On February 1, a day after successfully closing the Rs,000- crore mega follow-on public immolation( FPO) for Adani Enterprises, the sinking stock price of the company forced the group to withdraw the offer.