RIL shopping for mining, coal firms
With cash reserves of $5 billion (Rs 23,500 crore) behind it, the next big acquisition by Mukesh Ambani-led Reliance Industries Ltd is expected to be that of coal mines and minerals abroad.business Updated: Jun 02, 2010 23:35 IST
With cash reserves of $5 billion (Rs 23,500 crore) behind it, the next big acquisition by Mukesh Ambani-led Reliance Industries Ltd (RIL) is expected to be that of coal mines and minerals abroad.
Sources close to the group said that RIL is exploring possibilities of entering power generation by setting up new power plants as well as by acquiring existing plants in India.
“Acquisition of coal mines abroad besides an entry into power generation by setting up of ultra mega power projects (UMPPs or plants with a capacity of 4,000 mw) in India could be the next big step by RIL,” a source close to RIL said.
Step two could be an entry into transmission and distribution of power.
Brother Anil’s Reliance Power Ltd is already building three UMPPs of 4,000 mw, each and government policies prevent it from building any more right now.
“RIL’s entry into coal-based power generation need not be construed as competition with Anil’s RPL,” the source said. “If RIL does not develop power projects, Tata Power or some other company may do it. There is enough to be done by both in coal based power generation.”
This was discussed between the brothers and an ‘in-principle’ approval was taken while cancelling the non-compete agreement between them on May 23, another source close to the families said.
Spokespersons of both Mukesh- and Anil-managed companies refused to comment.
While only four UMPPs have been awarded so far, the government is planning to offer 10 more, the next two being in Chhattisgarh and Tamil Nadu.
“RIL has an excellent opportunity to get started with its plans to enter coal based power generation through the UMPP route,” said a senior power ministry official.
First Published: Jun 02, 2010 21:23 IST