In September 2024, Adani Power quietly acquired a small company for an absolute pittance. It was a coup because amongst the company’s assets were 405 hectares of land in the eastern Indian state of Odisha on which construction of a coal-power plant is permitted. Three months later, Adani Power applied for environmental approval to construct a 2400 MW coal-power plant on this large block of land – another investment in an ever-expanding arsenal of coal-fired power stations by the world's largest private developer of coal.
Key facts and Figures
- Project: Nilanchal Thermal Power Plant, formerly known as KVK Nilachal Power
- Company and project proponent: Orissa Thermal Energy Private Limited, subsidiary of Adani Power
- Location: Kandarei, Khanduali, Rahangol and Dalua villages in the Cuttack district of Odisha
- Proposed capacity: 3 units of 800 MW each: 2400 MW total
- Current status: Seeking terms of reference to conduct Environment Impact Assessment.
- Total project cost: Rs 27,438 crore (US $3.1 billion)
On 27 September 2024, Adani Power – the coal power arm of the Adani group and India’s largest private coal power company – acquired a small Indian family-run firm called Orissa Thermal Energy Private Limited. Founded in 2020 in Adani’s home city of Ahmedabad, the firm was originally called Padmaprabhu Commodity Trading. At the time of acquisition, it had a tiny share capital of INR 100,000 (US $1150).
But this small acquisition by Adani Power (it paid the above amount for the company) came with an outsize gain: 405 ha of land in eastern India to build a power plant.
In 2022, Padmaprabhu Commodity Trading (as the firm was then known) won an auction to acquire KVK Nilachal Power, a company undergoing bankruptcy proceedings. Founded by a businessman from southern India, KVK Nilachal Power owned the land parcel in Odisha state in eastern India where it once planned to set up a large coal-power plant. But this proposal, dating back to India’s last coal-power boom in the late 2000s, never came to fruition because of opposition from local farmers and wildlife campaigners over its impact on surrounding forests, as well as allegations that the project was using funds generated from an infamous accounting scandal. Eventually, the company defaulted on its bank loans, resulting in its liquidation and sale to Padmaprabhu.
Now, Adani Power plans to set up a 2400 MW coal-power plant on KVK Nilanchal’s land, more than double the 1050 MW capacity planned by the original owners. It plans to spend Rs 27,438 crore (US $3.15 billion) to set up the facility, named Nilachal Power Plant, for which it applied for environmental approvals in December 2024. In January 2025, an expert panel of the central environment ministry permitted it to conduct an environmental-impact assessment – the first step in obtaining the approval.
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While the former owner had failed to allay environmental concerns, Adani seems confident about overcoming the odds and setting up what would be one of its largest coal-power facilities in a part of the country that is rich in biodiversity.
The plant fits with Adani Power’s plans to nearly double its coal-power capacity to 30,000 MW by 2031, driven by a desire to exploit India’s growing demand for electricity and the Indian government’s policy to have most of it supplied by burning coal. It is also an example of the low-profile manner in which Adani Power has developed its coal-power projects. (The Kawai plant expansion is another example.) It has made no public statements announcing its plans at Nilachal / Nilanchal, and its acquisition of Padmaprabhu was announced only in a statement to stock exchanges and in its latest quarterly financial results released on 29 January 2025. Only its environmental-approval application – buried inside the environment ministry’s website – gives any clues about its plans.
Fraught history
According to the application for environmental approval filed by Adani Power, the Nilachal power plant site is surrounded by forests, the nearest just 700 metres from the site boundary. It is also 3.2 km from the buffer zone of the Kapilash Wildlife Sanctuary, a forest protected for its elephants.
The plant requires 9.67 million tonnes of coal per annum. Adani Power plans to source coal for the plant from the Bijahan, Gondbaheri Ujeni and Gondulpara coal projects. All of these are proposed new coal mines of Adani Enterprises, the Group’s coal-mining arm. Adani Enterprises is currently seeking environmental approvals for these mines, which have sparked intense opposition from local communities and environmentalists (as AdaniWatch has profiled here, here and here).
On 24 January 2025, Adani Power’s application for environmental approval for the power project was examined by the Indian environment ministry’s expert panel for coal-power projects. The panel recommended that the ministry allow the company to conduct an environmental impact assessment for the project – the first step in the approval process. (The ministry’s approval was pending as of 18 February 2025, but such approvals are usually granted.)
After conducting the EIA, the Odisha government would then conduct a public hearing with affected communities and submit minutes of the proceedings back to the expert panel for its assessment. This is typically the stage at which local communities voice their opposition to projects. As such, the next few months will be keenly watched, especially considering the fraught history of the project.
History of opposition
The Odisha high court halted the project in 2012 on the basis of a petition by a local organisation alleging that the project was proceeding without forest approvals, and raised concerns over its proximity to the elephant sanctuary. The court had asked the plant owner to obtain approvals from the National Board for Wildlife. In the court, the power plant company resorted to a dubious technical interpretation of environmental laws. It argued that the elephant sanctuary was declared in 2011, but that the plant had been proposed before that, and so the wildlife protection laws could not ‘strictly apply’ to it.
The coal-power project had the support of the state government, at the time led by a local political party called the Biju Janata Dal. The state’s wildlife board, which has the first say on approving projects affecting areas rich in wildlife, had permitted the project. While saying the power plant would not have any impact on wildlife, it also imposed several conditions on the project to protect elephants, including developing forest plantations of elephant fodder, and underpasses for movement of elephants (probably only on roads in the immediate project area, rather than on other roads potentially subject to greater traffic as a result of the development).
Meanwhile, with the project stalled and even its supposed benefits not available, local farmers who had lost their lands to the project asked the state chief minister in 2013 to return their lands. Instead, in 2014, the state chief minister further pushed the project by writing to the central government asking it to issue the final wildlife-approval to the project.
In 2009, the high court had temporarily stopped construction of the project on different grounds. A petition alleged that the plant was being funded by proceeds from the infamous Satyam Computers scandal, in which the owner of a major information technology company confessed to embezzlement and falsifying accounts. A family firm of the owner of Satyam Computers was involved in the power-plant project.
While no further details of the above court proceedings are available on the Odisha high court website, a report by India's central electricity authority from 2016 says that court’s stay orders were in force until May 2015, and construction work was in progress as of March 2016 (p 137 of this PDF). However, subsequent reports of the authority say that construction of the plant stalled again. In 2020 the power-plant company was ordered to be liquidated based on petitions by its lenders under India’s bankruptcy laws.
Enter Padmaprabhu
The plant landed in Adani Power’s portfolio in a curious manner. The plant was liquidated by means of a public auction, but the auction was delayed several times in 2021. The reports of the liquidator cite the COVID-19 pandemic as a reason. The plant was finally sold at auction in 2022 to Padmaprabhu Commodity Trading. Later, the firm changed its name to Orissa Thermal Energy Private Limited (Orissa is the original spelling of Odisha state), and became a wholly owned subsidiary of Adani Power starting 27 September 2024, as per a disclosure filed with Indian stock exchanges that day. The disclosure described the company as simply one engaged in ‘commodity trading activities’. The only reference to coal power was a line where it said the objective of the acquisition was ‘to set up infrastructure facilities /capacity augmentation of the Company on the land belonging to OTEPL.’ The same wording was used in the company’s financials for the quarter ending December 2024, released on 29 January 2025. The acquisition was otherwise understated. Adani Power made no mention of this acquisition in the presentation and press release that accompanied the financial statement.
In its quarterly financials, Adani Power also reported paying just INR 100,000 for the acquisition – an astonishingly low price for the plant, especially considering the substantial area of land under its control. It also raises questions about the role that Padmaprabhu Commodity Trading played in the acquisition of the plant.
The reserve price for the plant was set at Rs 103 crore, and later reduced to Rs 76 crore, which was the price at which Padmaprabhu bought the company.
It is not clear why Adani Power was not a part of the original auction. In its disclosure about acquiring Padmaprabhu, Adani Power said that it is not a ‘related party’. To India's registrar of companies, Padmaprabhu disclosed its directors as Kushal Mohit Shah and Kinnari Mohit Shah, with Kushal being the managing director. The two also held directorships of cement and finance companies in Ahmedabad.
There is no publicly available information about this duo, other than a Facebook post about social work done by a middle-aged couple of the same name living in Ahmedabad. Was this sale of a power plant for a throwaway price to Adani Power a piece of charitable ‘social work’?
In any case, Adani Power has acquired yet another coal-power plant. The proposed capacity for this power plant of 2400 MW would make it the fourth-largest in Adani’s currently operational stable of coal-power stations, after the Mundra, Tiroda and Singrauli plants. It is not only another example of Adani’s massive expansion of coal power through acquisitions, but, through the role of Padmaprabhu, it is also an illustration of the opaque and curious ways in which the Group operates.
