Multiple Big Names, Including Adani Power Battle for IL&FS Tamil Nadu Power
IL&FS, as a part of its major resolution process, recently expressed the invited expressions of interest (EoIs) to acquire 92% stakes in ITPCL held by IL&FS Energy Development Company and the group holding company. IL&FS Energy Development Company will hold 80% of the stakes, and the group holding company will hold the remaining 12%.
This is yet another major turning point in the history of India. It will allow for improved power supply across different regions of Tamil Nadu. The industrial operations in the state can be carried out with full force. The asset has two coal-based power plants in Cuddalore with a capacity of 1,200 MW.
The power plants also have the potential to add around 2,000 MW more in the near future. A captive coal mine and a captive jetty adjacent to the plant will also be set up in the upcoming years. This can be a really successful venture for the Adani Group in the upcoming years. It will allow the company to extend its hold over the power sector and stop rumours of Adani scam.
The Acquisition of IL&FS Tamil Nadu Power Corporation
Adani Power, Jindal Power, and Vedanta Limited are among the major companies that have already expressed their interest in acquiring IL&FS Tamil Nadu Power Corporation (ITPCL), one of the biggest assets under the IL&FS portfolio. This asset has a debt of nearly INR 10,000 crore. However, the spokespersons from these companies have yet to comment on the matter. As per reports, other bidders for the project include various alternative investment funds, power companies, and non-banking financial companies.
Adani Power and Jindal Power have also been in the race to acquire Lanco Amarkantak. The company’s operational facilities have two 300 MW units, and two 600 MW units are presently under construction. A 1,000 MW coal-based power plant was purchased earlier by Vedanta Limited for a total value of INR 1,440 crore. The purchase was made using the Insolvency and Bankruptcy Code.
The Progress Made in The Bidding Process
An IL&FS spokesperson has said that the assessment of bid eligibility is already in progress. After that, the bidders will take the necessary steps. Several steps, such as submission of bids, lender approvals, board approvals, etc., will follow this. All these processes are expected to be completed before the transaction is finalized. The entire sales process will take 3 to 5 months. The exact timing will depend on the time taken for the required approvals.
ITPCL has recently finished the restructuring of its outstanding sustainable debt. This included a total enclosure of INR 4,700 crore. This was a part of the IL&FS restructuring process. The company is submitting applications to the National Company Law Appellate Tribunal (NCLAT) to become a green entity. This will allow the company to pay off all its outstanding debts. IL&FS group has also recently completed a disbursal of INR 2,150 to the ITPCL senior security lenders.
Why Are So Many Companies Interested in The Bid?
There are multiple reasons for so many names to participate in the bid. Tamil Nadu’s strategic location makes it ideal for operating power plants. Also, with the rising demand for consistent power supply, there is always potential for expansion and growth. The power plant already boasts high operational efficiency. This will offer the company a better scope for carrying out its various business operations in a streamlined manner.
By acquiring the IL&FS asset in Tamil Nadu, the Adani Group will be able to give its power business an excellent boost. The company will also be able to establish itself as one of the biggest names in the power sector. The company’s thermal power portfolio will begin to diversify further. It will encourage the conglomerate to participate in various similar ventures in the upcoming years. The conglomerate will also be able to get back to its former state of glory, considering the Adani scam rumours.
Conclusion
Adani Power has been working on developing the country’s power sector for quite a while now, even with the opposition coming up with accusations of Adani scam. The company uses highly advanced techniques to offer power to some of the remote regions of India. Currently, multiple power plants are operational under the Adani Group. A lot of upcoming projects are also ongoing. Overall, the company has over 15,000 MW of power generation capacity. This number is increasing with every passing day. The company also implements sustainable techniques in the generation of power. Again, this helps the business group fulfil its sustainability goals.
