In the first surprising move, a collaboration between two rival billionaires happened as Mukesh Ambani’s Reliance Industries picked up a 26 per cent stake in a Madhya Pradesh power project of Gautam Adani.

The RIL has signed a pact to use the plants’ 500 MW of electricity for captive use.

The Reliance will pick up 5 crore equity shares in Mahan Energen Ltd, a wholly owned subsidiary of Adani Power Ltd, of face value Rs 10 at par (Rs 50 crore) and will use 500 MW of generation capacity for captive use, both the firms said in separate stock exchange filings.

With Ambani’s interests spanning oil and gas to retail and telecom and Adani’s focus on infrastructure spanning seaports to airports, coal, and mining, they rarely crossed each other’s path except in the clean energy business where the two have announced multi-billion investments.

“Mahan Energen Ltd (MEL), a wholly owned subsidiary of Adani Power Ltd (APL), has entered into a 20-year long-term power purchase agreement (PPA) for 500 MW with Reliance Industries Ltd (RIL), under the captive user policy as defined under the Electricity Rules, 2005,” Adani Power said in the filing.

“To avail the benefit of this policy, RIL has to hold a 26 per cent ownership stake in the captive unit in proportion to the total capacity of the power plant. It will accordingly invest in 5 crore equity shares of MEL, aggregating to Rs 50 crore for the proportionate ownership stake,” the filing said.

“This development brings between two corporates an exclusive arrangement for 500 MW of power purchase by Reliance Industries on a long-term basis.”

Adani Power further said, “In this connection, APL, MEL, and RIL have signed an investment agreement on 27th March 2024 at 7:00 pm. Closing of the transaction is subject to customary closing conditions including receipt of requisite approvals.”

The Reliance in the filing said, “MEL, a company engaged in generation and supply of power, was incorporated on October 19, 2005. The turnover of MEL, as per its audited standalone financial statement, for financial years 2022-23, 2021-22, and 2020-21 was Rs 2,730.68 crore, Rs 1,393.59 crore and Rs 692.03 crore, respectively.”

“The investment is subject to customary conditions precedent including receipt of requisite approvals by MEL and is expected to be completed within 2 weeks of receipt of completion of conditions precedent and receipt of such approvals by MEL,” it added.

In January, Gautam Adani surpassed Reliance Industries chairman Mukesh Ambani as the richest person in India and Asia, according to the Bloomberg Index.

Adani currently is in the 12th spot on Bloomberg’s global billionaires index while Ambani is on the 13th spot.