Adani Power, India’s leading private thermal power producer, has presented an improved and revised offer of 4,100 crore to the lenders of Lanco Amarkantak Power. Lanco Amarkantak Power, a thermal power company, is currently undergoing insolvency proceedings, sources familiar with the matter told the Economic Times.

ET on November 02 said that Adani Power offered 3,650 crore. The report said the unsolicited offers were made almost 10–11 months after 95% of lenders voted for a plan by the Power Finance Corp. (PFC)-led consortium.

A source told the Economic Times, “This is the second improved offer by Adani Power within six weeks, implying that it is willing to walk the extra mile to pursue lenders to sell them the distressed power company.

Also Read: Adani group to undertake 7 lakh crore investment over next 10 years

ET said Adani Power did not respond to its request for comment. 

Yet, “Adani Power has a chance because the National Company Law Tribunal (NCLT) has not endorsed PFC-led consortium’s 3,020 crore resolution plan,” ET quoted the above source as saying.

“But it could be challenging since two debtholders are also part of the winning bidder’s consortium. PFC and REC—both part of the consortium—jointly hold 41% of the debt in Lanco Amarkantak, and their consent is imperative for Adani,” ET quoted the same source as saying.

Also Read: Adani Group stocks jump up to 20%, market cap crosses 13 lk cr; here’s why

The Insolvency and Bankruptcy Code (IBC) does not prevent debtholders from bidding for a company. Anyone with over 34% debt can block a resolution; conversely, a plan is approved if 66% of lenders approve it, as reported by the ET. 

Meanwhile, Adani Power shares gained sharply. In just the past week, the stock witnessed a robust rally of 21.21%, and over the last three months, it surged by an impressive 44.60%. Starting from its low point in February 2023 at 132.40 per share, the stock has more than doubled investor wealth, delivering a stellar return of 303%.

Also Read: Gautam Adani’s wealth rises by $5.6 billion amid market rally

Regarding financials, the company reported an 848% YoY surge in its consolidated net profit to 6,594 crore in Q2 FY24 as compared to a net profit of 695.33 crore in the corresponding period of the last year, due to improved EBITDA, higher one-time income, and recognition of deferred tax asset.

Its consolidated revenue from operations rose by 61% YoY to 12,155 crore from 7,534 crore in Q2FY23. The company earned a tax credit of 1,371 crore during the quarter under review as against a tax expense of 139 crore, YoY.

Also Read: 7 of 10 Adani Group companies reported net profit growth in Q2; check full list

During Q2 FY24, the company and its subsidiaries achieved an average Plant Load Factor (“PLF”) of 58.3% and a power sales volume of 18.1 billion units (“BU”), as compared to a PLF of 39.2% and a power sales volume of 11 BU in Q2 FY 2022–23.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 11 Dec 2023, 09:35 AM IST

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