Adani Power’s Ambitious Plans Derailed as DB Power Deal Expires
The acquisition of DB Power assets by Gautam Adani-led Adani Power worth INR 7,017 crore has failed to materialize as the transaction deadline has expired. The announcement of the deal to acquire the company was made in August of last year. DB Power owns and operates a thermal power plant in Chhattisgarh.
“We wish to inform you that the long stop date under the memorandum of understanding dated August 18, 2022, has expired,” Adani Power said in an exchange filing on Wednesday (February 15), without providing any information regarding the extension of dates or agreement renegotiation.
Adani Power
Utility company
- Headquarters: Ahmedabad
- Founder: Gautam Adani
- Total assets: 81,981 crores INR (US$10 billion, 2022)
- Parent organization: Adani Group
- Net income: 4,911 crores INR (US$620 million, 2022)
- Founded: 22 August 1996
- Subsidiaries: Raipur Energen Limited, MORE
Adani Power’s acquisition of DB Power was intended to broaden its operations in the central Indian state by obtaining ownership and operation of a functional 2×600 MW thermal power plant located in Chhattisgarh’s Janjgir Champa district. Although the deal was originally expected to be finalized by October 31, the deadline was postponed by one month.
Subsequently, Adani Power granted an additional extension to December 31, and then further to January 15. Adani Power has effectively terminated the acquisition deal by declaring the expiration of the long stop date. This development occurred during a period when Adani Power, in conjunction with other publicly traded entities within the Adani group, experienced a collective loss of over INR 10 lakh crore.
The decline in value began on January 24, which coincided with the publication of a report by US-based short seller, Hindenburg Research, alleging stock manipulation and accounting fraud by the Gautam Adani-led conglomerate.
Here’s everything about DB Power
DB Power, which is involved in the establishment, operation, and maintenance of a thermal power generating station in Chhattisgarh, is a subsidiary of the holding company DPPL (Diligent Power Pvt Ltd). DB Power was incorporated under the Registrar of Companies in Gwalior on October 12, 2006. Over the past three financial years, DB Power has recorded turnovers of ₹3,488 crores for FY 2021-22, ₹2,930 crores for FY 2020-21, and ₹3,126 crore for FY 2019-20.