Qatar fund to buy 25% in Adani Electricity for Rs 3,200 crore

MUMBAI: Qatar’s sovereign wealth fund will buy 25.1% in Adani Electricity, which supplies power to large parts of Mumbai, for Rs 3,200 crore ($450 million).
The deal, which also includes quasi-equity loans, values Adani Electricity at Rs 12,800 crore. The transaction is expected to be completed in early 2020 after obtaining regulatory nod. Billionaire Gautam Adani got into the Mumbai power distribution play by acquiring the business from Anil Ambani.Adani purchased the power business for Rs 13,251 crore last year.
The Mumbai power distribution business is owned by the publicly listed Adani Transmission, in which the promoters hold 75%. Of the 75%, 44% is pledged with financial institutions, filings with stock exchanges showed. Shares of Adani Transmission also closed at Rs 342, up nearly 2% on the BSE on Wednesday.

Adani Transmission has a debt of Rs 17,900 crore and the deal with sovereign fund Qatar Investment Authority (QIA) will help to improve its balance sheet.
QIA and Adani Transmission said they plan to ensure that 30% of the electricity supplied by the Mumbai unit will be sourced from solar and wind power mills by 2023. Adani Electricity caters to more than 3 million customers across Mumbai and handles about 55% of the city’s electricity supply. “We believe this transaction is a significant step in the journey of the Adani Group, marking the start of a long term partnership with QIA,” said Adani Group chairman Gautam Adani.
The chairman, who founded the Ahmedabad-based group in 1988, has been striking partnerships with foreign companies in gas distribution, petrochemicals, among other businesses, in a bid to reduce risks.
The investment in Adani Electricity comes months after QIA put fresh capital in education technology company Byju’s. “This investment (in Adani Electricity) demonstrates our confidence in India, with whom Qatar shares deep-rooted ties and excellent relations,” said QIA’s chief executive Mansoor Al-Mahmoud.