reliance group

Reliance Infrastructure’s, BSES Yamuna & Rajdhani – For Sale

The Anil Ambani-led Reliance Group is looking to sell the Reliance Infrastructure’s Delhi electricity distribution business, to pay off lenders. The unit is India’s largest in terms of consumers.

Italy’s biggest utility Enel Group is competing with homegrown private power producer-distributors Greenko and Torrent Power to acquire the company.

Reliance Infrastructure had hired KPMG to find buyers for the 51% stake each it holds in BSES Rajdhani Power (BRPL) and BSES Yamuna Power (BYPL).

The Delhi government owns the remaining 49% in both. The three submitted bids last Friday to comply with the deadline, said people directly involved in the matter.

Reliance Group and Tata Power supply power to about 93% of Delhi. The two BSES companies cater to 4.4 million customers in the national capital, handling peak power demand of 4.8 GW. Last July, New Delhi touched an all-time high electricity demand of 7.4 GW.

Apart from being a marquee circle, bidders consider the high mix of residential and commercial users as a big positive. Only 5% of the user base is industrial.

The asset was shown to several private equity funds including Brookfield, CDPQ and I-Squared Capital, but only three submitted bids, they said. The diligence exercise will begin after the shortlist is drawn up, expected in the coming week.

Reliance Group is expecting an enterprise valuation of Rs 5,000 crore, inclusive of debt, said sources.

On Friday, a London court ordered Ambani to repay within 21 days an interim $717 million owed to a Chinese banking consortium led by Industrial & Commercial Bank of China, the world’s largest bank by assets.

This was for loans taken by group company Reliance Communications. Ambani had faced the prospect of a jail term last year for delaying payments to Ericsson so is in a hurry to push the deal through.

Reference- Economic Times, The Financail Express, livemint, Business Standard