Key Points
Two of Indias largest conglomerates Reliance Industries and the Adani Groups power business entered into an understanding late last week..
It will involve RIL picking up a 26 per cent stake in Mahan Energen Limited (MEL), a unit of Adani Power housed in Madhya Pradesh..
In terms of ticket size, it is relatively small at Rs 50 crore but the strategic implications are important...
In a statement, RIL said the proposed investment is in compliance with the provisions of Electricity Rules, 2005 in terms of which the company, as a captive user, is required to own 26% proportionate ownership in one unit of MEL of 600 MW capacity, with RIL being the captive user of 500 MW generation capacity...
To put it in perspective, a captive power plant normally situated close to a large manufacturing unit to provide power to that business is constructed with the objective of providing regular supply...
