Adani Power Limited (NSEI:ADANIPOWER) has begun talks to acquire the 600 MW Butibori thermal power project in Nagpur once owned by Anil Ambani's bankrupt Reliance Power Limited (NSEI:RPOWER), two people aware of the matter said. A deal is likely in the range of INR 24,000 million-INR 30,000 million, translating to INR 40 million-INR 50 million per MW, the people cited above said on the condition of anonymity. A potential acquisition would help India's largest private thermal power producer capitalize on the rising electricity demand in the country.

"Adani Power is negotiating with CFM Asset Reconstruction Co. to acquire the project under Vidarbha Industries Power Ltd. The value of the project, which consists of two power plant units, was earlier around INR 60,000 million, but currently, the production (power generation) has stopped; so, the valuation has to be lower. The plant fits into Adani's strategy," one of the two people said.

The Butibori project is owned by Vidarbha Industries Power, a subsidiary of Reliance Power. CFM ARC, which acquired all of its loans for INR 12,650 million, is currently the only lender to the project. Emails sent to Adani group and CFM ARC remained unanswered.

"The entire deal will be funded through the internal accruals of Adani group," the person cited above said.