Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar, will invest ₹3,200 crore for a 25.1 percent stake in Adani Electricity Mumbai Ltd (AEML). The deal also includes subordinated debt investment by QIA in AEML.
The power transmission company acquired the business from Reliance Infrastructure for Rs 12,100 crore in August 2018. At present, the business is housed under its subsidiary Adani Electricity Mumbai (AEML) that serves more than 30 lakh consumers across 400 sq km in Mumbai.
In a statement, Adani Transmission said the company, AEML, and a subsidiary of QIA had entered into a definitive agreement. It said, “The agreement is for the sale of a 25.1 per cent stake in AEML to QIA and for a shareholder subordinated debt investment by QIA in AEML.”
As part of the agreement, Adani Transmission Ltd and QIA have agreed to ensure that over 30 percent of the electricity supplied by AEML will be sourced from solar and wind power plants by 2023. The transaction is likely to be complete by early 2020, subject to receipt of regulatory approvals and satisfaction of customary conditions.
Meanwhile, Gautam Adani, chairman for the group said, “We believe this transaction is a significant step in the journey of the Adani Group, marking the start of a long-term partnership with QIA. Together, we will continue to work towards improving the reliability of supply and consumer satisfaction for over three million AEML consumers served in Mumbai.”
QIA Chief Executive Officer, Mansoor Al-Mahmoud said, “This investment demonstrates our confidence in India, with which Qatar shares deep-rooted ties and excellent relations.” It marks the entry of QIA in the Indian power sector.
Reportedly, this is the Adani group’s second stake sale to a foreign investor or company this year. Earlier in October, French energy company Total entered into an agreement for a 37.4 per cent stake acquisition in Adani Gas.