Almost two months since its last asset acquisition, the country’s largest privately-held power generator, Adani Power, said on Monday it was buying Avantha Power & Infrastructure’s 1,200 MW thermal power project. Avantha said that Korba West Power (KWPCL), which operates the power plants, is valued at more than Rs 4,200 crore.

The project, consisting of two 600 MW plants each, is located in Korba in Chattisgarh. Adani Power bought 100% of KWPCL’s shareholding and will fund the transaction with a loan of Rs 2,700 crore and the remaining part will be equity, says a source familiar with the matter. Adani Power had a net debt of Rs 40,478.79 crore at the end of September quarter, according to Bloomberg.

This is the second acquisition for the power producer after it bought Lanco Infratech’s 1,200 MW Udupi power plant in August for more than Rs 6,000 crore, which made it the largest deal in the thermal power segment in the country.

One of the two 600 MW plants was commissioned in March 2014, says KWPCL’s FY14 report obtained from RoC. There are no revenue or profits associated with the plant as on the annual report date.

“Coal linkages are in place and a fuel supply agreement has been signed with the South Eastern Coalfields. Long-term purchase agreements for 35% of power are in the process of being signed with state government/state power trading company,” KWPCL said in a statement.
The company added that a memorandum of understanding has been entered into for Unit II with the government of Chattisgarh, and that it has applied for a long-term coal linkage with the ministry of coal.

“Terms of reference have been received and public hearing has been successfully conducted for environmental clearance… MoUs have been entered for supply of imported coal for balance quantity for Unit I and entire quantity for Unit II,” the report said.

KWPCL has a debt of around Rs 3,310 crore on its balance sheet. The document was uploaded on the RoC website on October 24.
Capital good company Crompton Greaves and paper products maker Ballarpur Industries both have a stake in Avantha Power & Infrastructure, according to BSE filings on Monday.

“The acquisition of KWPCL expands our footprint in India, particularly in the coal mining belt of India, and we are bullish on expanding our presence in the country,” Gautam Adani, chairman of Adani Group, said.

“This is the time for consolidation in the Indian power sector…” Adani said, hinting at possible future deals by a company that is aiming at a generation target of 20,000 MW by 2020. The company already has operational capacity of 9,240 MW.

FY15 has already seen two acquisitions in the power generation sector, of which one was the Adani-Lanco deal. In September, JSW Energy announced it will buy Jaypee Group’s two hydroelectric power projects, which it recently valued at Rs 9,700 crore. This takes total power sector deals to Rs 20,000 crore in the current financial year.