Bharti Airtel, a leading telecommunications company in India, has acquired a 5.46% additional stake in Avaada MHAmravati Private Limited. The telco informed the stock exchanges about the same on March 30, 2023. Nxtra Data Limited, the data center subsidiary of Bharti Airtel, has entered into an agreement which has resulted in the acquisition of a 5.464% additional stake in Avaada.
Avaada MHAmravati is a special-purpose vehicle set up with the aim of owning and operating the Captive Power Plant in terms of the regulatory requirement for captive power consumption under electricity laws.
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Back on June 6, 2022, Airtel announced that it has entered into an agreement for the acquisition of 51,17,000 (11.696%) equity shares in Avaada. The cost of this acquisition was Rs 10 for each share, meaning Rs 5,11,70,000. The cost of acquiring a 5.464% additional stake in the company cost Rs 2,39,05,000 as Airtel acquired 2,390,500 shares of Rs 10 each.
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Airtel's data center business is going to require a lot of energy and power to sustain and expand. Thus, the acquisition of a stake in Avaada is a strategic move from the telco as the entity would help the company in establishing, commissioning, setting up, and operating renewable energy sources. Avaada would look to set up and operate renewable energy sources such as wind, solar, bio-mass, hydro, geo-thermal, and more facilities.
In a circular to the stock exchanges, Airtel said, "we wish to inform you that Nxtra Data Limited, a subsidiary of the Company has entered into an
agreement resulting in acquisition of 5.464% additional stake in Avaada MHAmravati Private Limited, a special purpose vehicle formed for the purpose of owning and operating the Captive Power Plant, in terms of the regulatory requirement for captive power consumption under electricity laws."