New Delhi, Oct 31 (IANS): Fair trade watchdog, Competition Commission of India (CCI), has approved Adani Power's Rs.6,000 crore purchase of Lanco Infratech's 1,200 MW thermal plant in Udupi, Karnataka, setting at rest concerns on monopolising market share.
"Post combination the combined market share of the acquirer, both in terms of installed capacity and electricity generation, would not be significant enough to raise any competition concern," CCI said in its order on the matter, released Thursday.
By this transaction Adani Power would acquire Udupi Power Corp (UPCL) from Lanco Infratech, Lanco Thermal Power, Portia Properties and certain individual shareholders.
"The proposed combination relates to the business of power generation in India. The power generation market in India is characterised by presence of a large number of players," it added.
Infrastructure major Lanco Infratech had, in August, said it has sold a 1,200 MW thermal power plant in Karnataka to Adani Power for about Rs.6,000 crore, in a move to cut its debt.
"For Lanco Infratech, this transaction will support the company in reducing its debt and will enable Lanco to receive about Rs.2,000 crore as cash and additionally, Adani Power will take Udupi Power's long-time debt of around Rs.4,000 crore," Lanco had announced.
The CCI order said there was no vertical relationship between Adani Power and UPCL as the latter did not use any transmission services provided by Adani Power.
According to Lanco Infratech, the Udupi plant is the "first independent power project in the country based on 100 percent imported coal with a captive jetty of four million tonnes per annum and an external coal handling system in the new Mangalore Port Trust."
Lanco's Udupi power plant has already signed with the Karnataka government for further expansion of 1,320 MW, the statement said.
While 90 percent of the electricity generated from the plant is supplied to Karnataka, the remaining goes to Punjab.
Currently, Adani Power has an installed generation capacity of about 8,580 MW.