Mukesh Ambani's Reliance Industries has picked up a 26 per cent stake in a power project owned by rival billionaire Gautam Adani and signed a pact to use the plant's electricity for captive use.
Reliance will pick up 50 million equity shares in Madhya Pradesh-based Mahan Energen Ltd, a wholly owned subsidiary of Adani Power Ltd, of face value Rs 10 at par (Rs 500 million) and will use 500 MW of generation capacity for captive use, the two firms said in separate stock exchange filings.
The two businessmen, hailing from Gujarat, have often been pitted by media and commentators against each other, but they have for years tiptoed around each other to reach the top two rungs of Asia's wealth ladder.
With Ambani's interests spanning oil and gas to retail and telecom and Adani's focus on infrastructure spanning seaports to airports, coal and mining, they rarely crossed each other's path except in the clean energy business where the two have announced multi-billion investments.
Adani aspires to be the world's largest renewable energy producer by 2030 while Reliance is building four gigafactories at Jamnagar in Gujarat - one each for solar panels, batteries, green hydrogen, and fuel cells.
Adani is also building three giga factories for manufacturing solar modules, wind turbines and hydrogen electrolysers.
A clash was also forecast when Adani group applied to participate in an auction of spectrum or airwaves capable of carrying fifth-generation (5G) data and voice services. However, unlike Ambani, Adani bought 400 MHz spectrum in the 26 GHz band, which is not for public networks.
On the contrary, the two have been far from rivals. In 2022, a firm with erstwhile links to Ambani sold its stake in news broadcaster NDTV to Adani, paving the way for the takeover.
Adani was also present at pre-wedding celebrations of Ambani's youngest son, Anant, at Jamnagar earlier this month.
"Mahan Energen Ltd, wholly owned subsidiary of Adani Power Ltd, has entered into a 20-year long-term power purchase agreement (PPA) for 500 MW with Reliance Industries Ltd, under the captive user policy as defined under the Electricity Rules, 2005," Adani Power said in the filing.
It is unclear where Reliance intends to use the Mahan Energen power. It already has captive units at mega oil refining and petrochemical complexes in Gujarat and Maharashtra and its coal-bed methane extractions in Sohagpur in Madhya Pradesh may not need 500 MW of electricity. (PTI)
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