Adani Energy Solutions Ltd Expands Portfolio with Essar Transco Ltd Acquisition

On May 16, 2024, Adani Energy Solutions Ltd (AESL) informed the exchanges that through its subsidiary, Adani Transmission Step-Two Limited (ATSTL), it had acquired a 100% stake in Essar Transco Limited. The acquisition happened after getting requisite regulatory and other approvals for an Enterprise Value of ₹1,900 crore. The share acquisition is pursuant to definitive agreements signed in June 2022.

The acquisition encompasses a fully functional 400 kV, 673-circuit kilometres inter-state transmission line connecting Mahan in Madhya Pradesh to the Sipat pooling substation in Chhattisgarh. This project operates within the Central Electricity Regulatory Commission (CERC) regulated return framework and commenced operations on September 22, 2018.

Aligned with Adani Energy Solutions Ltd’s capital management principles, Adani Transmission Step-Two Limited procured financing under highly competitive terms, setting a new capital-raising standard. This initiative unlocks cost-efficient debt for operational assets, showcasing the robustness of AESL’s utility cash flows. The financing underscores the longevity of AESL’s licences, backed by a stable regulatory framework, with MUFG Bank Ltd serving as the exclusive lender.

The acquisition of the Mahan-Sipat transmission network will consolidate AESL’s presence in central India, with 4 operating assets covering 3,373 km in the region. The acquisition is consistent with AESL’s philosophy of expanding its existing capacities, bringing efficiency through operational synergies, and creating a network effect. Along with strong energy demand, the ability to recognise and tap market opportunities within the areas of interest continues to propel and position Adani Energy Solutions Ltd at the forefront of energy transition in India.

About Adani Energy Solutions Limited

Adani Energy Solutions Limited is a part of the prominent Adani Group. Adani Energy Solutions Limited operates across diverse segments within the energy sector, including power transmission, distribution, smart metering, and cooling solutions. The company stands as the largest private transmission company in India. It has a presence across 17 states of India and a cumulative transmission network of 21,182 Circuit kilometres and 57,011 MVA transformation capacity.

On May 16, 2024, the share price of Adani Energy Solutions Ltd opened at ₹1,030.00, touching the day’s high at ₹1,031.60, as of 10:39 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.