Adani Transmission has signed an agreement with a subsidiary of Qatar Investment Authority.
December 12, 2019
Qatar Investment Authority’s (QIA) plans to invest in Adani Electricity Mumbai, the first by a foreign investor in power distribution, indicate renewed overseas interest in India’s beleaguered power sector, but the mood is still cautious as fundamental challenges persist.
The power distribution sector is heavily regulated in India, with most power distribution companies (DISCOMs) still under the control of state government-owned utilities. With these DISCOMs dealing with huge debts and muted cash flows, the entire supply chain is still under pressure. But industry players believe that QIA’s investment will prompt long-term overseas investors to re-look at opportunities in the country, albeit selectively.
Adani Transmission has also announced that it has signed an agreement with a subsidiary of QIA to sell 25.1 per cent stake in Adani Electricity Mumbai. A shareholder subordinated debt investment is also part of the deal in which QIA’s total investment is pegged at Rs 3,200 crore.
