Power sector picks up the pieces after slump

The prolonged inactivity in the debt-laden, fuel-starved and bankrupt power sector finally seems to be ending with two large acquisitions announced in the last few weeks. First, Reliance Power, promoted by the Anil Dhirubhai Ambani Group, acquired three operational hydropower assets from the Jaiprakash group for upwards of Rs 10,000 crore. Then Adani Power of Gautam Adani bought Lanco's 1,200 Mw power plant at Udupi in Karnataka for an enterprise value of nearly Rs 6,000 crore. The deals come on the back of state-owned NTPC, India's largest power generator, receiving at least 30 proposals in response to its offer to buy projects which could be "operational, commissioned, under construction or under planning". NTPC is sitting on a cash reserve of Rs 17,000 crore and is expected to leverage that to make acquisitions worth Rs 25,000 crore to Rs 30,000 crore.

Earlier in February, Singapore's Sembcorp Utilities had bought a 45 per cent stake in a 1,320 Mw thermal power plant being built by NCC Power Projects at Nellore in Andhra Pradesh. Last December, GDF Suez of France acquired 74 per cent in a 1,000 Mw thermal power project operated by Meenakshi Energy in Andhra Pradesh.