The Adani Group is reportedly leading the race to acquire a stake in Ahmedabad-based Diamond Power Infrastructure Ltd (DPIL), a company specializing in power transmission and distribution equipment. With a market capitalization of approximately ₹5,000 crore, DPIL has become a strategic target for Adani as it seeks to bolster its infrastructure and vendor control capabilities.
Background of Diamond Power Infrastructure Ltd (DPIL)
DPIL manufactures cables, conductors, and transmission towers, and also undertakes complete transmission line projects. In 2022, the company was acquired through a National Company Law Tribunal (NCLT) process by a consortium comprising GSEC Ltd and businessman Rakesh Shah. Currently, the promoters hold about 90% of the company, necessitating a reduction to 75% to comply with SEBI regulations.
Adani’s Strategic Intent
The potential acquisition aligns with Adani Group’s broader strategy to enhance its infrastructure capabilities and tighten control over its vendor ecosystem. This move is part of Adani’s ambitious capital expenditure plan, which aims to increase spending by up to 15% to ₹1.4-1.45 lakh crore in the current fiscal year.
Adani has previously employed a similar strategy by acquiring stakes in companies like PSP Projects Ltd and ITD Cementation India, allowing existing management to continue operations while integrating them into its expansive infrastructure network.
Implications of the Acquisition
- For Adani Group: The acquisition would provide Adani with enhanced control over its supply chain, particularly in the power transmission sector, supporting its infrastructure expansion plans.
- For DPIL: Partnering with Adani could offer DPIL increased business opportunities and financial stability, aiding in its growth trajectory.
- For the Industry: This move could signal a trend of consolidation in the power infrastructure sector, with major players seeking to integrate vertically for efficiency and control.
Conclusion
Adani Group’s pursuit of a stake in DPIL underscores its commitment to strengthening its position in the power infrastructure domain. As discussions progress, the potential partnership could have significant implications for both entities and the broader industry landscape.Reuters