Gautam Adani-promoted Adani Power and Naveen Jindal-promoted Jindal Power (JPL) are in the race to acquire Ind-Barath Thermal Power in a bankruptcy auction, two people aware of the development said.
Interest in distressed power companies has recently increased due to a shortage of power supply and the government nudge to state-owned banks to finance them.
Deepak Maini, the resolution professional of the insolvent company, the Adani group and JPL did not respond to query.
Both JPL and Adani Power submitted expressions of interest and are evaluating the prospects of giving respective binding bids.
Ind-Barath has two completed power generation units of 150 megawatts each, located at Tuticorin, Tamil Nadu, but the plants have been shut since 2016 due to the lack of power purchase agreements (PPA).
A teaser note sent out by the resolution professional to more than a dozen potential bidders indicated that the prospective buyer might need to invest about 75 crore to restart the plants.
The company had a short-term PPA with Tamil Nadu Generation and Distribution Corporation (Tangadco). The discom started to default on offtake and payments, according to the teaser note.
"Net realization at present is Rs 4.75 per unit after meeting line losses and wheeling charges," the note stated.
The resolution professional has admitted 2,148 crore in claims from financial creditors, with Punjab National Bank topping the list at 21% of the total, followed by State Bank of India at 18%. Bank of India, Bank of Baroda, Axis Bank and Canara Bank are the other creditors.
Due to the shortage of power supply, several corporates are eyeing distressed electricity generators. Last month, Vedanta acquired Athena Chhattisgarh Power for 565 crore in liquidation for captive purposes. Athena has two partially complete power units of 600 M Weach.
Similarly, Jindal Power is set to acquire bankrupt Simhapuri Energy for 300 crore, as reported on June 22. Simhapuri, undergoing the liquidation process, has 600 mw power units and runs on imported coal.