Reliance Power will acquire 433 mw of power generation assets from group company Reliance Infrastructure for Rs 1,095 crore to bring its entire power generation portfolio under one roof. Analysts, however, said the move threw up questions on the valuation and utilisation front.
The decision was taken at the board of directors meeting on Thursday. The 433 mw will comprise 220 mw at Samalkot in Andhra Pradesh, 165 mw in Kerala and 48 mw in Goa for Rs 1,095 crore, Reliance Power said in a regulatory filing to the Bombay Stock Exchange. ?The value of assets to be transferred is estimated at Rs 1,095 crore based on independent valuation by global consulting firm, KPMG,? the company said.
Industry watchers said the transfer raised a few questions for shareholders, especially on the valuation front, and also on utilisation. ?It cannot be determined whether these valuations, quoted in the media, are high or low. One will have to wait and watch, till the proposal receives approval of shareholders,? said Gaurang Shah, assitant vice-president , Geojit BNP Paribas. Reliance Power shares were up 1.16% on the BSE on Friday to close at Rs 156.50, while Rinfra shares were down marginally to close at Rs 1056.25.
The assets are held by the subsidiaries of Reliance Infrastructure and the transfer would take place after obtaining the requisite approval, the filing added. All the three plants have significant potential for capacity expansion. With this acquisition, Reliance Power would have over 1,000 mw operating capacity and 600 mw of the Phase I of Rosa Power Project in UP. The company is implementing power projects with aggregate capacity of over 35,000 mw. The move is also seen by some as a follow-up action to the recent thawing of issues between RIL and ADAG.