Reliance acquires five crore shares of this Adani Power subsidiary; Check details

In a stock exchange notification on Tuesday, July 9, RIL said that it has subscribed to 5 crore Class ‘B’ equity shares of face value of ₹10 each of Adani Power’s arm Mahan Energen Ltd (MEL).

Class B shares are a type of common stock issued by companies. Usually, they are held by promoters or senior management and carry higher voting rights than Class A shares.

RIL's move followed its announcement in March earlier this year when it announced the acquisition of a 26% stake in the 600-MW Mahan thermal power project in Madhya Pradesh for ₹50 crore to secure electricity for its captive use.

RIL and Mahan Energen had informed that they had entered into a 20-year long-term power purchase agreement for this purpose.

As part of the deal, Adani Power had agreed to designate a part of the 600 MW unit of the Mahan thermal power project, out of its aggregate operating and upcoming capacity of 2,800 MW, as a captive unit.

The deal was in compliance with the provisions of the Electricity Rules, 2005. According to the norms, a captive user consuming the power generated from the captive plant for self-use must necessarily hold at least 26% ownership in the captive generating company.

After the completion of the share subscription, the RIL stock slipped around 1% in trade on Wednesday, July 10, to hit the day’s low of ₹3,126.3 apiece on the NSE. However, the stock recovered some of the losses to trade at ₹3,149 apiece, down 0.99%, on the NSE at 12:14 pm.