Adani, Ambani is collaborating first time: Reliance prefers 26% stake in Power project of Adani

The acrimonious billionaires Gautam Adani and Mukesh Ambani have agreed to establish their first joint venture, a power facility in Madhya Pradesh. 

Ambani's business, Reliance, has promised to use the 500 MW of power generated by the plants internally and has acquired a 26% share in Adani Power's Madhya Pradesh project.

Reliance will purchase 5 crore equity shares in Mahan Energen Ltd., a fully owned subsidiary of Adani Power Ltd. The shares, valued at ₹50 crore par, will be valued at ₹10. Additionally, the two companies have stated that they want to use 500 MW of generating capacity internally in their own stock market filings.

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In its annual report, Adani Power stated that Mahan Energen Ltd (MEL), a solely owned Adani Power Ltd (APL)subsidiary, has entered into a long-term power purchase agreement (PPA) of for 20-year for 500 MW with Reliance Industries Ltd (RIL), under the captive user policy as demarcated under the Electricity Rules, 2005.

RIL must own a 26% ownership share in the captive unit, which is directly correlated to the power plant's total operating capacity, in order to be eligible for the benefits of this program. As a result, the statement states that it will invest 5 crore MEL equity shares, or ₹50 crore for the proportionate ownership stake.

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Adani and Ambani, brothers from Gujarat, are frequently used as counterpoints in debates on business dynamics. Moreover, there has been a long-standing competition between the two to become the richest Asian.