Adani and Reliance Continue Bidding for Lanco Amarkantak as Jindal Power Drops Out

Jindal Power has recently dropped from the race to acquire the thermal power company Lanco Amarkantak, leaving Adani and Reliance in the bidding race. This has offered an excellent edge to the Adani Group as it takes one step ahead towards acquiring Lanco and expanding its control over the power sector. So, here, we will look at what happened during the bidding process and what Adani Group’s chances of winning the bid are.

The Bidding Process

Previously, Jindal Power had bid more than Adani Power to acquire Lanco, but now, the company has dropped out of the bidding. Three main companies are competing in the acquisition race: Adani Power, Reliance Industries, and Power Finance Corporation Limited. This gives the Adani Group an excellent scope to acquire control over the thermal power company. The acquisition will also boost Adani Power’s business after the Adani Group controversies. The company will be able to ensure a seamless power supply in different remote regions of India.

What Caused Jindal Power to Drop Out of the Bid?

As per recent news, Jindal Power has applied with the Amravati National Company Law Tribunal (NCLT) to withdraw its petition despite outbidding Adani Power in the previous bidding session. This decision was mainly because Jindal Power was not comfortable giving upfront and unconditional offers. That is why they pulled out of the race. Presently, Adani Power is the highest bidder in the acquisition race for Lanco Amarkantak, dramatically increasing its chances of emerging victorious in the bidding process.

Both Reliance Industries and Power Finance Corporation Limited are trailing behind closely. The final results for the bid will soon be declared, and the other subsequent processes will occur afterwards. It must be noted that before backing out of the bidding process, Jindal Power provided an INR 4,203 crore cash offer along with an INR 100 crore bank guarantee during the beginning of the bidding process. Meanwhile, Adani Power increased its offer from INR 3,650 to INR 4,100 crore in January, right after the Supreme Court dismissed the charges of Adani Group controversies. All these steps were taken because of the prosperity that could be achieved by gaining control of Lanco.

The final auction will soon take place, and Reliance and the PFCL consortium are expected to participate along with Adani Power. However, Adani Power is the strongest container in the bid. Because of its enhanced expertise in the power sector, the company has already built an extraordinary reputation for itself. The company has also strengthened its boundaries in the power sector in recent years and built a new horizon for itself.

What Caused the Bidding to Start Altogether?

The bidding war for Lanco Amarkantak power started when the company mentioned experiencing corporate insolvency proceedings. The cash-strapped company operates a coal-based thermal power project with a reasonably high thermal power generation capacity. The project is located on the Korba-Champa state highway in Chhattisgarh.

The thermal power project run by Lanco has two subcritical units. Each of these units has a capacity of 600 MW. These units are located near Anpara in Uttar Pradesh. The first phase of the project is now fully operational. Currently, it has two units of 300 MW. The second phase of the project is currently under construction. It has two units of 600 MW.

Lanco has an INR 1,800 crore crash in the company because of the operations of the first phase. Upon successful completion of the second phase of the project, it is expected to earn extraordinary revenue. This makes the Lanco thermal power plant a profitable venture for the Adani Group. It will lead the conglomerate to the path of success and allow it to continue its acquisition journey.

Conclusion

In this way, the global conglomerate led by Gautam Adani continues navigating through the challenges posed by the Adani Group controversies in its quest for success. With time, we will witness the business group getting involved in more diverse projects that will add to its existing portfolio.