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Qatar to invest $450 million in Adani’s Mumbai power business

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The Indian Telegraphhttps://theindiantelegraph.com.au/
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  • The transaction is expected to be completed in early 2020, subject to regulatory approvals and customary conditions
  • For the second half of FY20, Adani’s power distribution business reported revenue of ₹4,103 crore and operating profit of ₹1,043 crore

Qatar Investment Authority (QIA) is investing $450 million (about ₹3,200 crore) in Adani Electricity Mumbai Ltd (AEML), the flagship power transmission asset of billionaire Gautam Adani.

Adani Transmission Ltd (ATL), the parent of AEML, said in a stock exchange filing that the investment is for AEML’s 25.1% stake and subordinated debt. It did not provide the quantum of equity and debt.

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As part of the transaction, Adani Transmission and QIA have also agreed that more than 30% of the electricity supplied by AEML will be sourced from solar and wind power plants by 2023.

QIA chief executive Mansoor Bin Ebrahim Al-Mahmoud said in the statement: “We look forward to a long-term partnership with the Adani Group, with whom we share an intergenerational perspective on investments and a common vision for the sustainable growth and the continued success of AEML.”

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AEML is the licensee for an integrated power distribution, transmission and generation business that currently serves more than 3 million consumers in Mumbai. Adani Transmission said AEML has a market share of around 87% by licence area in Mumbai, 67% by consumers served and 55% by electricity supplied.

The transaction is expected to be completed in early 2020, subject to regulatory approvals and customary conditions.

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This follows the August 2018 deal of Anil Ambani, who sold his Mumbai power distribution business to ATL for ₹12,700 crore. The QIA investment values the AEML business at roughly ₹13,000 crore.

For the second half of FY20, Adani’s power distribution business reported revenue of ₹4,103 crore and operating profit of ₹1,043 crore.

Adani Group chairman Gautam Adani said in the statement, “We believe this is a significant step in the journey of the Adani Group, marking the start of a long-term partnership with QIA.”

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