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Adani Power Ltd has agreed to acquire DB Power in a cash transaction at an enterprise value of 7,017 crore as India’s largest private thermal power producer seeks to expand its capacity.

DB Power owns and operates a 2x600 megawatt (MW) thermal power plant at the Janjgir Champa district in Chhattisgarh, Adani Power said in a regulatory filing.

DB Power has long and medium-term power purchase agreements for 923.5MW of its capacity, backed by fuel supply agreements with Coal India Ltd, and has been operating its facilities profitably, Adani Power said.

Revenue of DB Power, a unit of Diligent Power Pvt. Ltd, rose 19% to 3,488 crore in the year ended 31 March 2022 from 2,930 crore in the previous year.

Adani Power, which has an installed capacity of 12,450MW across Gujarat, Maharashtra, Rajasthan, Karnataka and Chhattisgarh, will acquire the total issued, subscribed and paid-up equity share capital and preference share capital of Diligent Power.

The acquisition will help the Adani Group expand its thermal power generation capacity in Chhattisgarh.

The initial term of the memorandum of understanding to complete the acquisition of DB Power will be valid till 31 October and may be extended by mutual agreement.

The proposed transaction is subject to the receipt of approval from the Competition Commission of India and any other regulators as may be identified following the due diligence, Adani Power said.

Shares of Adani Power rose 3.2% to 412.20 on BSE.

The announcement of the transaction was made after the close of trading in Mumbai.

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