Adani Power Offloads Stakes to AdaniConnex for ₹540 Crore

Adani Power Ltd. has signed a preliminary deal to offload its entire stake in two subsidiaries, Aviceda Infra Park Ltd. and Innovant Buildwell Pvt. Ltd., to AdaniConnex Pvt. Ltd. for Rs 540 crore. The transaction is expected to be completed by March 31, 2024.

What are the details of the deal?

According to a filing to the BSE on Thursday, January 25, Adani Power has entered into a Memorandum of Understanding (MOU) to sell its 100% equity stake in Aviceda Infra Park Ltd. (AIPL) for Rs 190 crore and Innovant Buildwell Pvt. Ltd. (IBPL) for Rs 350 crore to AdaniConnex Pvt. Ltd. (ACX).

AIPL and IBPL are wholly owned subsidiaries of Adani Power that hold land parcels in Mumbai and Noida, respectively. The sale of these assets is part of Adani Power’s strategy to monetise its non-core assets and focus on its core business of power generation and distribution.

The proposed transactions fall within related party transactions and are done on an arm’s length basis, the filing said.

Who is AdaniConnex?

AdaniConnex Pvt. Ltd. is a 50:50 joint venture between Adani Enterprises Ltd., which is a promoter group company of Adani Power, and EdgeConneX, a global leader in data center solutions.

AdaniConnex was formed in February 2021 to develop and operate data centers across India, leveraging the expertise and experience of both partners.

AdaniConnex aims to provide co-location, hosting and managed services to customers in various sectors such as cloud providers, content providers, network operators, enterprises, government and financial institutions.

What is the impact of the deal?

The deal will help Adani Power reduce its debt and improve its liquidity position. As of September 30, 2023, Adani Power had a consolidated net debt of Rs 54,685 crore.

The deal will also enable AdaniConnex to expand its footprint in the Indian data center market, which is expected to grow at a compound annual growth rate of 12% from 2020 to 2025, according to a report by ResearchAndMarkets.com.

The deal will also benefit the customers of both Adani Power and AdaniConnex, as they will have access to reliable power supply and state-of-the-art data center infrastructure.