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Adani Power secures NCLT approval to acquire Lanco Amarkantak Power for ₹4,101 crore, boosting its capacity to 15,850 MW. Despite the recent stock decline, Adani Power share price has surged by 108.12% in the past year.
The Hyderabad bench of the National Company Law Tribunal (NCLT) has greenlit Adani Power’s ₹4,101 crore resolution plan to acquire Lanco Amarkantak Power Ltd (LAPL) through the insolvency resolution process.
Lanco Amarkantak Power, a distressed power company, carries admitted liabilities totaling ₹15,633 crore. Adani Power, a listed company promoted by Gautam Adani, has proposed to settle these liabilities with a payment of ₹4,101 crore as part of the acquisition deal.
The acquisition marks a critical step in Adani Power's strategy to expand its operational power generation capacity, which will now total 15,850 MW.
LAPL operates a 600 MW thermal power plant located in Pathadi Village, Korba District, Chhattisgarh. The company has secured long-term power purchase agreements with Haryana and Madhya Pradesh via the Power Trading Corporation Ltd, ensuring steady demand for its electricity output.
Additionally, LAPL has a long-term Fuel Supply Agreement (FSA) with South Eastern Coalfields Limited, a subsidiary of Coal India Ltd, which ensures a consistent supply of coal for its operations.
The acquisition process for LAPL has been prolonged and challenging. Initially admitted for corporate insolvency in September 2019, the resolution was delayed due to various complications. An initial offer of ₹3,000 crore from Twin Star Technologies, owned by metals tycoon Anil Agarwal, was rejected by lenders in January 2022 as it was deemed too low.
When the sale process was restarted, Adani Power, Reliance Industries, and a consortium led by Power Finance Corporation (PFC) expressed interest. However, Adani and Reliance withdrew from the auction, citing process violations. The PFC-led consortium became the sole bidder, offering ₹3,020 crore. Although this plan garnered 95% lender approval in January 2023, it was not endorsed by the NCLT.
Adani Power then submitted an unsolicited improved offer of ₹3,650 crore, later raising it to ₹4,101 crore, which was ultimately approved by the NCLT.
In the previous trading session, Adani Power's share price closed at ₹671.90 on NSE, reflecting a decline of ₹23.25 or 3.34%. However, the stock has shown remarkable performance over the past 12 months, delivering an impressive return of 108.12%, effectively doubling investors' money.
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