Adani raises funds to buy RInfra’s Mumbai power business

Adani Transmission has tied up funds for its acquisition of the Mumbai power business from Reliance Infrastructure (RInfra), people, with direct knowledge of the development, said.

According to sources, Adani Transmission has arranged funds for the deal through a 15-year tenure loan, at an interest rate of 9.5 per cent.

The loan had been extended through a consortium of lenders, including ICICI Bank, State Bank of India, and YES Bank, sources said. In December, Adani Transmission and RInfra entered into a definitive binding agreement with Adani for 100 per cent stake in the Mumbai power business, which includes integrated business of generation, transmission, and power distribution for Mumbai. The deal was valued at ~132.51 billion, of which business was valued at ~121.01 billion and regulatory assets approved was at ~11.50 billion.

A spokesperson for RInfra said, “We are hopeful of a deal closure by June end.” The spokesperson for Adani Group in an email response said, “We hereby confirm that we have arranged finances for the deal.”

The deal is crucial for RInfra as it will help the company turn into a debt-free firm at the standalone level. In its earlier statement, RInfra said that this would mark the end of the company’s debt reduction exercise.

For Adani Transmission, once complete, will mark its entry in the power distribution business and access to the Mumbai distribution circle and also make it a significant player in India’s private distribution space.