Adani Power’s failed acquisition of DB Power Ltd. for Rs 7,017 crore comes amid an ongoing controversy surrounding the Adani Group’s financial dealings. The deal was announced in August 2022 and was expected to expand Adani Power’s offerings in the thermal power sector in Chhattisgarh, where DB Power operates a thermal power generating station.
The deal’s collapse is seen as a blow to Adani Power’s expansion plans in the state, and it remains to be seen how this will impact the company’s future growth and financial performance. Adani Power’s shares surged to a 5% upper circuit on Thursday after the announcement, reflecting investors’ disappointment at the deal’s failure.
The Adani Group has been facing accusations of stock manipulation and accounting fraud by US short-seller Hindenburg Research, which published a report on January 24 alleging that key Adani companies had taken on substantial debt and put the entire group on precarious financial footing. The Adani Group has strongly denied these allegations and called them a “calculated attack on India.”
However, the Hindenburg report has had a significant impact on the Adani Group’s financial standing, as the value of Adani Enterprises’ stock has plummeted by over 50% since its publication, leading to the cancellation of a Rs 20,000-crore follow-on issue offer (FPO).
The collapse of Adani Power’s deal with DB Power may further dent investor confidence in the Adani Group’s financial management. It remains to be seen how the group will address these concerns and reassure investors.
Adani Power is a power generation company subsidiary of the Adani Group, one of India’s largest conglomerates. The company operates a range of thermal and renewable power plants across India, with a total installed capacity of over 12,000 megawatts (MW).
Adani Power is one of India’s largest private power producers and supplies power to industrial and residential consumers across the country. The company has been involved in several high-profile power projects in India, including the Mundra Ultra Mega Power Project, one of the world’s largest coal-fired power plants.
What is DB Power company?
DB Power is a company engaged in establishing, operating, and maintaining a thermal-power generating station in Chhattisgarh, central India. The company currently operates a 2×600 MW thermal power plant in the Janjgir Champa district of Chhattisgarh.
In the financial year 2022, the company recorded a turnover of Rs 3,488 crore. The acquisition of DB Power by Adani Power was expected to expand Adani Power’s operations in the thermal power sector in Chhattisgarh. However, the deal has now fallen through, as the deadline for completion of the transaction has expired.