Shares of Adani Power fueled by the Board’s approval of an amalgamation scheme

Shares of Adani Power fueled by the Board’s approval of an amalgamation scheme

by 5paisa Research Team Last Updated: Mar 23, 2022, 11:38 AM IST

The amalgamation intends to achieve size, scalability, integration, enhanced controls, optimization of cost and resources, increased financial strength and flexibility.

Adani Power Ltd (APL), an S&P BSE 200 company announced yesterday that its Board of Directors have approved, (subject to requisite approvals/consents), the scheme of amalgamation of the below mentioned wholly-owned subsidiaries (Transferor companies) of the company with itself.

  • Adani Power Maharashtra Limited

  • Adani Power Rajasthan Limited

  • Adani Power (Mundra) Limited 

  • Udupi Power Corporation Limited

  • Raipur Energen Limited

  • Raigarh Energy Generation Limited

As per the press release, the appointed date of the scheme is set as 1 October 2021. Further, all assets and liabilities of the above-mentioned companies shall be transferred to and recorded by Adani Power Ltd (Transferee company) at their carrying values.

It should be noted that after the scheme comes into effect, no equity shares of the Adani Power shall be allotted in lieu or exchange of the holding of the company in the transferor companies. Further, equity shares held by the APL in the Transferor companies shall stand cancelled on the effective date without any further act or instrument or deed.

Why this amalgamation?  

All the wholly-owned subsidiaries, along with APL are engaged in the business of generation and sale of power.

With this amalgamation, APL aims to achieve size, scalability, integration, enhanced controls, optimization of cost and resources, increased financial strength and flexibility, resulting in a more resilient and robust organization that can address dynamic business situations, and volatility in various economic factors in a focused manner, in order to achieve improved long-term financial returns.

In Q3FY22, on a consolidated basis, APL’s top-line de-grew by 22% YoY to Rs 5360.88 crore. However, its bottom-line grew by a stellar 175.67% YoY to Rs 218.49 crore.

At 11.33 am, the shares of Adani Power Ltd were trading at Rs 131.90, an increase of 6.59% from the previous day’s closing price of Rs 123.75 on BSE. Their 52-week high and low stands at Rs 167.05 and Rs 69.95 on BSE.

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54,326.39
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