Adani Transmission gains on acquiring Essar's Mahan-Sipat transmission project

Adani Transmission (ATL) rose 2.06% to Rs 1993.25 after the company said that it has signed definitive agreements with Essar Power for acquiring 673 ckt kms operational inter-state transmission project owned and operated by Essar Power Transmission.

The enterprise value for the transaction is Rs 1,913 crore. The target asset is an operational 400 kV inter-state transmission line linking Mahan in Madhya Pradesh to Sipat pooling substation in Chhattisgarh with line length of 673 circuit kilometre (ckt kms). The project operates under the Central Electricity Regulatory Commission (CERC) regulated return framework and was commissioned on 22 September 2018.

The proposed transaction will be executed through transaction steps which shall be subject to necessary regulatory approvals and other consents, the company stated.

Anil Sardana, MD & CEO of Adani Transmission said: "The acquisition of Essar's transmission asset will consolidate ATL's presence in central India. With this acquisition, ATL is well on path to achieve its 20,000 ckt kms target before time. We continue to remain at the forefront of grid stability and provide sustainable, reliable, and affordable energy solutions while creating long term sustainable value for our stakeholders."

ATL said that the acquisition is in line with its value added growth strategy through organic as well as inorganic growth opportunities. With this acquisition, the cumulative network of ATL will reach 19,468 ckt kms, out of which 14,952 ckt kms is operational and 4,516 ckt kms is under various stages of execution. Further, with this scale of operations, ATL will derive synergies in terms of operation and maintenance (O&M) cost optimization and shared resources. It will also fortify its position of being the largest private sector transmission and distribution company in the country, the company said.

ATL is the transmission and distribution business arm of the Adani Group. It has a cumulative transmission network of approximately 18,795 ckm, out of which approximately 14,279 ckm is operational and approximately 4,436 ckm is at various stages of construction.

The company reported 7.6% fall in consolidated net profit to Rs 237 crore on a 13.5% increase in net sales to Rs 2,582 crore in Q4 FY22 over Q4 FY21.

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