Qatar Investment Authority (QIA) is investing $450 million (about ₹3,200 crore) in Adani Electricity Mumbai Ltd (AEML), the flagship power transmission asset of billionaire Gautam Adani.
Adani Transmission Ltd (ATL), the parent of AEML, said in a stock exchange filing that the investment is for AEML’s 25.1% stake and subordinated debt. It did not provide the quantum of equity and debt.
As part of the transaction, Adani Transmission and QIA have also agreed that more than 30% of the electricity supplied by AEML will be sourced from solar and wind power plants by 2023.
QIA chief executive Mansoor Bin Ebrahim Al-Mahmoud said in the statement: “We look forward to a long-term partnership with the Adani Group, with whom we share an intergenerational perspective on investments and a common vision for the sustainable growth and the continued success of AEML."
AEML is the licensee for an integrated power distribution, transmission and generation business that currently serves more than 3 million consumers in Mumbai. Adani Transmission said AEML has a market share of around 87% by licence area in Mumbai, 67% by consumers served and 55% by electricity supplied.
The transaction is expected to be completed in early 2020, subject to regulatory approvals and customary conditions.
This follows the August 2018 deal of Anil Ambani, who sold his Mumbai power distribution business to ATL for ₹12,700 crore. The QIA investment values the AEML business at roughly ₹13,000 crore.
For the second half of FY20, Adani’s power distribution business reported revenue of ₹4,103 crore and operating profit of ₹1,043 crore.
Adani Group chairman Gautam Adani said in the statement, “We believe this is a significant step in the journey of the Adani Group, marking the start of a long-term partnership with QIA."