DB Corp rises 17% after Adani Power buys assets from group entity

New Delhi: Shares of DB Corp rallied more than 17 per cent to a new 52-week high, during early trade on Monday after Adani Power acquired its group company DB Power.

Gautam Adani-led Adani Power has agreed to buy the thermal power assets of DB Power (DBPL) from Dainik Bhaskar Group for around Rs Rs 7,017 crore enterprise valuation. DB Corp is the flagship company of Dainik Bhaskar Group.

Following the development, shares of DB Corp zoomed over 17 per cent to Rs 112.05, a new 52 week high, before trading at Rs 109.80 at 9.50 am. The scrip had settled at Rs 95.45 on Friday.

Both sides signed an agreement for the all cash deal on Friday afternoon. The initial term of the MOU shall be till completion of the acquisition October 31, 2022, which may be extended by mutual agreement.

DB Power has 2 units of 600 MW each of thermal power in Janjgir-Champa district, Chattisgarh. Dainik Bhaskar’s power business comes under a separate holding company.

Its holding arm, Diliigent Power (DBPL) that owns 83.87 per cent in the company. PE fund Global Infrastructure Partners (GIP) holds 16.13 per cent.

The company clocked a turnover of Rs 3,488 crore for FY 2021-22. In FY21, its PAT was Rs 312 crore. It has around Rs 5,500 crore debt. At this valuation, the deal translates to Rs 6 crore/MW, among the highest in the sector in recent times.

Adani Power rose about 4 per cent to Rs 428, hitting its new 52-week high. The scrip, which settled at Rs 412.20 on Friday, was trading at Rs 424.80 at 9.55 am on Monday.

Adani Power, whose shares have risen about 480 per cent in the last one year, has market capitalisation close to Rs 1.65 lakh crore. It is the 33rd largest domestic listed company, ahead of power giants like Power Grid, Coal India and NTPC.