Reliance Power

Reliance Power Limited (R-Power), formerly Reliance Energy Generation Limited (REGL) is a part of the Reliance Anil Dhirubhai Ambani Group. It was established to develop, construct, operate and maintain power projects in the Indian and international markets. Reliance Infrastructure, an Indian private sector power utility company and the Reliance ADA Group promote Reliance Power. The present CEO of Reliance Power is K. Raja Gopal since 2 May 2018.[3]

Reliance Power Limited
TypePublic
BSE: 532939
NSE: RPOWER
IndustryElectric utility
Founded17 January 1995 (17 January 1995)
FounderDhirubhai Ambani
HeadquartersDAKC, Navi Mumbai, India
Key people
Anil Ambani
(Chairman)
Raja Gopal Krotthapalli
(CEO)
Productselectrical power
natural gas
ServicesElectricity generation and distribution
natural gas exploration, production, transportation and distribution
Revenue₹8,202 crore (US$1.1 billion)[1] (2020)
₹−4,255 crore (US$−600 million)[1] (2020)
Number of employees
8,550 including 2,305 permanent employees
(March 2018)[2]
ParentReliance Anil Dhirubhai Ambani Group
Subsidiaries50 (March 2018)
Websitereliancepower.co.in

The company is the sole distributor of electricity to consumers in the suburbs of Mumbai. but in 2017 they sold Mumbai operation to Adani Power. It also runs power generation, transmission and distribution businesses in other parts of Maharashtra, Goa and Andhra Pradesh. With its subsidiaries, it is developing 13 medium and large-sized power projects with a combined planned installed capacity of 33,480 MW.

Reliance Natural Resources merged with Reliance Power in 2010, shortly after its initial public offering.[4] As of March 2018, Reliance Power has 50 subsidiaries. In Fortune India 500 list of 2019, R-Power was ranked as the 176th largest corporation in India with 9th rank in 'Power sector' category.

Overview

The company was incorporated on 17 January 1995 as Bawana Power Private Limited and changed its name to Reliance Delhi Power Private Limited in February 1995. Its name was changed to Reliance Energy Generation Limited in March 2004, and finally to Reliance Power Limited in July 2007.[5]

The company website identifies project sites broadly to be located in western India (12,220 MW), northern India (9,080 MW) and northeastern India (4,220 MW) and southern India (4,000 MW). They include six coal-fired projects (14,620 MW) to be fuelled by reserves from captive mines and supplies from India and abroad, two gas-fired projects (10,280 MW) to be fuelled primarily by reserves from the Krishna Godavari basin (the "KG Basin") off the east coast of India, and four hydroelectric projects (3,300 MW), three of them in Arunachal Pradesh and one in Uttarakhand.

Power generation projects
Electricity transmission grid in eastern India.

Coal based Thermal power projects

Gas based Thermal power projects
  • Samalkot Power Project: 2,400 MW (3 x 800 MW) gas-fired thermal power project at Samalkot in East Godavari district of Andhra Pradesh. This partially implemented project is at a standstill for reasons of financial stress and lack of gas supply. Construction is not complete and whatever capacity has been installed is not being used. In 2018, Reliance power signed an agreement with the government of Bangladesh to "relocate" (or divert?) one unit from Samalkot to that country.[8]

Shelved thermal power projects
  • Tilaiya Ultra Mega Power Project – 4,000 MW at Tilaiya in Jharkhand - Shelved. Reliance Power exited this project in 2015, citing delays in land acquisition. Three years later, in May 2018, it sold all remaining interests in the project to Jharkhand State Power Development Corporation for a sum of Rs. 112 crores.
  • Krishnapatnam Ultra Mega Power Project at Krishnapatnam in Nellore district, Andhra Pradesh - 3,960 MW (6×660 MW) - shelved. Shortly after the project was cleared in 2011, Indonesia changed its coal export policy and the project became unviable. Nevertheless, Reliance took possession of the land. In 2016, Reliance began the process of abandoning the project by seeking an exit deal with the Andhra Pradesh government. There were issues of money and bank guarantees, and the matter went into litigation. In January 2019, the Delhi High Court upheld the invocation of bank guarantees (300 crores) by the government. The project stands shelved.
  • Chitrangi Power Project: 3,960 MW (6 x 660 MW) - This coal-based project in Chitrangi in Singhauli district of Madhya Pradesh was canceled and shelved even before the agreement was signed. In 2011, Reliance Power won the tendering process by bidding aggressively a price of only 3.70/unit of electricity. However, it made no movement for several years. Resultantly, environment clearance lapsed in 2016 and was not extended. In March 2018, the Uttar Pradesh Power Corporation, which was the customer for the project, canceled the contract and seized the bank guarantees.[9]
  • Dhirubhai Ambani Energy City (DAEC) Dadri Power Project in Uttar Pradesh: 7,480 MW (shelved)

Renewable Energy

There is only one operational Renewable Energy (RE) project. All the rest are pending at various stages; some may have been shelved formally or informally. The projects are:

Shelved or pending RE projects
  • Kalai-2 Power Project: 1,200 MW
  • Siyom Power Project: 1,000 MW
  • Tato-2 Power Project: 700 MW
  • Emini Power Project: 500 MW
  • Amulin Power Project: 400 MW
  • Urthing Sobla Power Project: 400 MW
  • Mihundon Power Project: 400 MW
  • Solar Thermal Power project: 125 MW
  • PV solar power Project: 40 MW
  • Vashi Wind Power Project: 45 MW

(Wind Power – 400 MW, Solar Power – 500 MW and Hydropower – 2,500 MW)

Power distribution
  • BSES Delhi (BSES Rajdhani Power and BSES Yamuna Power)
  • Reliance Power Mumbai
  • BSES Kerala
  • BSES Odisha

Order to Shanghai Electric

Anil Dhirubhai Ambani placed a single order for $8.3 billion with Shanghai Electric Group Company (SEC) for buying 36 coal-fired thermal power generation units, spare parts, and related services over a 10-year period. This took the total deal size between Reliance Power and the Chinese power equipment maker over the past couple of years to $10 billion, making it the largest contract between a private Indian company and a government-owned Chinese firm.

While Reliance Power has also given a $2.2 billion deal to US-based General Electric, the agreement signed with SEC is on a different plane. The Chinese company will supply boiler, turbine and generator packages for up to 30,000 MW capacity of coal-based power at six plants, including the 4000 MW ultra mega power project in Krishnapatnam, the 3960 MW Project in Chitrangi and the 4000 MW Power Project in Tilaiya.

Loans from Exim bank

Reliance Power Ltd. signed an agreement with the US Export-Import Bank in 2010 for a $5 billion loan to finance power projects. The loan will finance 900 megawatts of renewable technologies such as solar and wind energy,[10] as well as up to 8000 MW of gas-based power generation technology, the Indian company said in a statement. This $5 billion agreement is in addition to the $917 million already approved by the Ex-Im Bank for Reliance Power's coal-fired power plant at Sasan in central India.

The agreement will allow Reliance Power access products and services at competitive rates and help create manufacturing and services jobs in the US. The loan will also enable quicker access to the bank's long-term dollar loans. Reliance Power signed a pact with the US's General Electric Co. (GE) worth INR100 billion ($2.2 billion) to implement a 2400 MW power plant. The plant will be located in the southern Indian town of Samalkot and the pact was signed during the visit of President Barack Obama.[11]

Initial public offering and controversies

In 2007, Reliance Power issued a red herring stating an intention to go public with an IPO. The proposed IPO was to fund the development of its six power projects across the country whose completion dates are scheduled from December 2009 to March 2014.[12] The Securities and Exchange Board of India, the organisation which regulates activity in the Indian stock market, placed some restrictions based on a complaint about the formulation of the IPO.[13] The complaint also resulted in a public interest litigation being filed against the company. However, the Supreme Court of India passed a ruling that the IPO would go ahead even if any order is passed by any Indian court against the venture.[14]

The IPO opened on 15 January 2008 and attracted $27.5 billion of bids on the first day, equivalent to 10.5 times the stock on offer, thereby creating India's IPO record. The upper cut off price for the bid was Rs. 450[15] A media report pointed out that, if the company's stock price were to cross Rs. 650–700, Anil Ambani would go past L. N. Mittal to become the richest Indian.[16] "It is a reflection of world community in the future of India... Investors seem to be confident in the future of Indian economy," Indian Finance Minister, P. Chidambaram told the media about the IPO.[17]

Reliance Power debuted on the stock markets on 11 February 2008. However, the markets were still reeling after the January 2008 stock market volatility, and concerns over speculation that the issue was overpriced sent the stock plummeting soon after its listing. At the end of the first day, the stock traded at a value that was 17 percent lower than its issue price of Rs. 450.[18] Investors who were betting on the stock reaching 1.5 or even twice its issue price lost a fortune in the process. On 25 February, in an effort to mitigate investor losses, Reliance Power decided to issue 3 bonus shares for every 5 shares held.[19]

Carbon credits

On 2 February 2011, United Nations registered Reliance Power's Sasan Power Plant to be eligible for earning carbon credits followed by Krishnapatanm Ultra Mega Power Project and Tilaiya Ultra Mega Power Projects.

United Nations issues carbon credits to companies that employ advanced technologies in reducing carbon emission.

These carbon credits can then be sold to those companies that are emitting more than their statutory emission

References
  1. "Reliance Power Ltd. Financial Statements". moneycontrol.com. Retrieved 14 July 2020.
  2. "Reliance Power annual report 2017-18" (PDF).
  3. "Reliance Power appoints K Raja Gopal as CEO, S Vaishnav as CFO".
  4. "Anil Ambani mulls merging Reliance Power, RNRL". Reuters. 2 July 2010. Retrieved 2 July 2010.
  5. "Reliance Power Limited: Private Company Information]". Retrieved 16 January 2008.
  6. "Reliance Power commissions third unit of Sasan UMPP". Business Standard. Press Trust of India. 24 March 2014.
  7. "Reliance-Power starts up 2nd unit of Butibori plant - Times of India".
  8. Reliance Power signs agreement with Bangladesh
  9. UPPCL cancels RPower’s Chitrangi power project, seizes bank guarantee
  10. "US Exim Bank to fund Reliance Power's solar expansion". The Times of India. 17 April 2012. Retrieved 22 June 2012.
  11. JOHN SATISH KUMAR (8 November 2010). "Reliance Power Secures Loan, Signs Deal with GE, Others". The Wall Street Journal. Retrieved 22 June 2012.
  12. Noronha, Paul (5 January 2008). "Reliance Power set to raise over Rs 10,000 cr via IPO". Retrieved 16 January 2008.
  13. Layak, Suman (28 December 2007). "SEBI puts curbs on Reliance Power offer". Archived from the original on 23 January 2008. Retrieved 15 January 2008.
  14. ENS Economic Bureau (12 January 2008). "Reliance Power can go ahead with IPO: Supreme Court". Retrieved 15 January 2008.
  15. M.C. Govardhana Rangan, Archana Chaudhary (15 January 2008). "Reliance Power Record IPO Gets $27.5 Billion of Bids". Archived from the original on 18 January 2013. Retrieved 15 January 2008.
  16. Times News Network (16 January 2008). "father would have been a happy man: Anil Ambani on REPL IPO". Retrieved 16 January 2008.
  17. "Reliance Power IPO subscribed 10 times in 4 hrs". Press Trust of India. 15 January 2008. Retrieved 16 January 2008.
  18. "Hard lessons from the primary market fiasco financial scene". The Hindu. 18 February 2008.
  19. "Reliance Power offers 3:5 bonus, share cost now Rs 269". 25 February 2008.
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