Adani Power share price has zoomed 511% from its 52-week low of ₹69.95 touched on August 24, 2021

The acquisition of DB Power's thermal power assets will help the company to expand its offerings and operations in the thermal power sector in the state of Chhattisgarh.

Shares of Adani Power hit a new high of Rs 428.20, up 4 per cent on the BSE in Monday's intra-day trade in an otherwise weak market 

after the company said it has agreed to acquire the thermal power assets of DB Power for the enterprise value of nearly Rs 7,017 crore. At 09:32 am, Adani Power traded 3 per cent higher at Rs 423.50, as compared to 0.7 per cent decline in the S&P BSE Sensex 

DB Power owns and operates a running 2x600 MW thermal power plant at District Janjgir Champa in Chhattisgarh, and had a turnover of Rs 3,488 crore for the fiscal 2021-22 (FY22). 

DB Power has long and medium-term power purchase agreements for 923.5 MW of its capacity, backed by fuel supply agreements with Coal India, and has been operating its facilities profitably. 

"The acquisition will help to expand its offerings and operations in the thermal power sector in the state of Chhattisgarh. The proposed transaction is subject to receipt of approval from the Competition Commission of India 

Meanwhile, in the past one month, Adani Power has outperformed the market by surging 47 per cent as against a 6 per cent rise in the S&P BSE Sensex. Over the past six months, the stock has zoomed 255 per cent as compared to 3 per cent gain in the benchmark index. 

The sharp rally in the stock price was triggered after the company reported 17-fold jump in its consolidated profit after tax (PAT) at Rs 4,780 crore in the June quarter (Q1FY23). The Adani Group electric utility company had posted PAT of Rs 278 crore in Q1FY22. 

Earnings before interest, taxes, depreciation, and amortization (ebitda) jumped 227 per cent YoY to Rs 7,506 crore. The growth was aided by prior period income recognition, improved tariff realisation, and change in sales mix, partially offset by impact of higher fuel cost. 

"A number of reforms undertaken by the Indian government have strengthened the Indian power sector. These comprise fuel linkages under the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI) and the Ujwal DISCOMS Assurance Yojana (UDAY).