Ravi Sharma vs. Adani Enterprises Ltd. and Others

Case No. 36 of 2024

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COMPETITION COMMISSION OF INDIA

Case No. 36 of 2024

In Re: Ravi Sharma C- 128, 2nd Floor Lajpat Nagar – I New Delhi – 110 024 Informant

And

Adani Enterprises Ltd. Shantigram, Near Vaishnodevi Circle SG Highway, Ahmedabad- 382421 Gujarat, INDIA Opposite Party-1/OP-1

M/s Adani Green Energy Four Limited 4th floor-South Wing Shantigram, SG Highway, Ahmedabad- 382421 Gujarat, INDIA Opposite Party-2/OP-2

Mr. Gautam S. Adani Adani House, near Mithakhali Crossing, Navrangpura, Ahmedabad – 380 009 Opposite Party-3/OP-3

Mr. Sagar R. Adani Shantigram, Near Vaishnodevi Circle SG Highway, Ahmedabad- 382421 Gujarat, INDIA Opposite Party-4/OP-4

M/s Azure Power India Private Limited 3rd Floor, Asset 301-304 & 307 World Mark 3, Aerocity New Delhi – 110 037 Opposite Party-5/OP-5

Solar Energy Corporation of India Block Tower 2, NBCC Tower Block B East Kidwai Nagar Kidwai Nagar New Delhi – 110 023 Opposite Party-6/OP-6

Andhra Pradesh Central Power Distribution Corporation Limited Beside Polytechnic College, ITI Road Vijaywada, Krishna Opposite Party-7/OP-7

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Andhra Pradesh – 520 008

Andhra Pradesh Eastern Power Distribution Company Limited P & T Colony, Seethammadhara, Visakhapatnam Andhra Pradesh - 530 013 Opposite Party-8/OP-8

Andhra Pradesh Southern Power Distribution Company Limited 19-13-65/A, Srinivaspuram Tiruchanoor Road Andhra Pradesh, Tirupati – 517 501 Opposite Party-9/OP-9

Government of Andhra Pradesh Energy Department A.P. Secretariat Velagapudi, Amravati Andhra Pradesh – 522 237 Opposite Party-10/OP-10

GRIDCO Limited Janpath Bhubaneshwar Khurda Odisha – 751 002 Opposite Party-11/OP-11

Tamil Nadu Generation and Distribution Corporation 144, Anna Salai Chennai - 600 002 Opposite Party-12/OP-12

CORAM:

Ms. Ravneet Kaur Chairperson

Mr. Anil Agrawal Member

Ms. Sweta Kakkad Member

Mr. Deepak Anurag Member

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Order under Section 26(2) of the Competition Act, 2002

1. Information in the present matter was filed by Shri Ravi Sharma (‘Informant’), under Section 19(1)(a) of the Competition Act, 2002 (the ‘Act’), against Adani Enterprises Ltd. (‘OP-1’), Adani Green Energy Limited (‘OP-2’), Shri Gautam S. Adani (‘OP-3’), Shri Sagar R. Adani (‘OP-4’), Azure Power India Private Limited (‘OP-5’), Solar Energy Corporation of India Ltd. (‘OP-6’/‘SECI’), Andhra Pradesh Central Power Distribution Corporation Ltd. (‘OP-7’), Andhra Pradesh Eastern Power Distribution Company Limited (‘OP-8’), Andhra Pradesh Southern Power Distribution Company Limited (‘OP-9’), Government of Andhra Pradesh, Energy Department (‘OP-10’), GRIDCO Ltd. (‘OP-11’), and Tamil Nadu Generation and Distribution Corporation (‘OP-12’/‘TANGEDCO’), alleging contravention of the provisions of the Act.

2. In the Information, OP-1 to OP-4 are stated to be members of the Adani Group. It is stated that OP-1 is their flagship company owned by OP-3. OP-4 is the nephew of OP-3 and is an Executive Director in OP-2. OP-2 is a 100% subsidiary of OP-1 and is in the business of renewable energy. The Informant has stated that OP-1 and OP-2 collectively hold a substantial market share of approx. 16% of India’s total power generation capacity. OP-5 is stated to be a subsidiary of a United States (‘US’) based company and is also involved in the business of renewable energy generation. OP-6 is stated to be a company under the Ministry of New and Renewable Energy (‘MNRE’), Government of India, whose mission is, inter alia, to promote increase of renewable energy in India. OP-7 to OP-12 are stated to be State owned power distribution companies who have signed agreements to purchase power from OP-6.

3. It is stated that on 25.06.2019, OP-6 issued a Request for Selection (‘RfS’) document along with standard Power Purchase Agreement (‘PPA’/‘PPAs’) and Power Sales Agreement (‘PSA’/‘PSAs’) for selection of solar power developers for setting up of 7 GW ISTS connected Solar PV Power Plant linked with setting up of 2 GW (per annum) Solar Manufacturing Plant. Package A of the same included setting up of Solar Manufacturing Plants related to Cell (500 MW) and Modules (500 MW), while Package B included setting up of Solar Manufacturing Plants related to Ingots (500 MW) and Wafers (500 MW). Two Blocks were to be allocated under each package. The successful bidders were assured PPAs up to 2000 MW against 500 MW Solar Manufacturing Plants under Bidding Package A and

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up to 1500 MW against 500 MW manufacturing capacity under Package B. It is alleged by the Informant that OP-6 has designed the RfS documents to favor top players like OP-1, OP-2 and OP-5 that if no bidders come forward for any of the bid capacity under aforesaid packages, OP-6 will automatically award remaining capacity to the successful bidders, through the ‘Transferred Capacity’ namely underbidding/undersubscribed capacity under either of the packages. The maximum ceiling under the RfS was ₹2.93 per kilowatt hour (‘KwH’) for 25 years. The last date of bid submission was 13.11.2019.

4. It is further stated that the techno-commercial bids were opened on 14.11.2019 and the financial bids were opened on 21.11.2019. 3 bidders qualified namely, OP-2, OP-5 and one Navayuga Engineering Co. Ltd. Thereafter, e-Reverse Auction was held on 22.11.2019 and pursuant to the same, Letter of Awards (‘LoAs’) dated 10.12.2019 were awarded to 2 successful bidders viz. OP-2 and OP-5 @ ₹2.92/KwH.

5. As per the Information, the LoA awarded to OP-2 was for cumulative capacity of 2GW towards manufacturing facilities and 8GW towards solar power projects, while the LoA awarded to OP-5 was for 1GW towards manufacturing facilities and 4GW towards solar power projects. It was a part of the Addendum to the LoAs that “… in the event, for any reason, there is no willing Buying Utility(ies) to enter into a Power Supply Agreement (‘PSA’) and procure the power from SECI fully or in part, then to the extent of such quantum for which the Buying Utility(ies) are not forthcoming, the PPA shall not be entered into with … and there shall not be any legal or financial implication to SECI in relation to such quantum including associated quantum of manufacturing facilities. … Further, … shall be entitled to sell power generated from solar power plants setup under the scheme to any party or exchange under intimation to SECI for the capacity for which capacity corresponding PSA(s) are not entered into with buying utilities.”

6. With regard to specific clauses of the RfS and the entire chain of events subsequent to issue of RfS, the Informant has inter-alia alleged that: (a) RfS document was designed in a manner to ensure participation of only big players in the market; (b) RfS document was prepared in contravention of the Ministry of Power (‘MoP’) guidelines in as much that the said guidelines do not allow clubbing of solar power plants with solar manufacturing plants; (c) ‘Green Shoe Option’ was provided by OP-6 in contravention of MoP guidelines to favour top players like OP-1, OP-2 and OP-5; (d) LoAs and Addendum to LoAs were issued to OP-2 and OP-5; (e)

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undertakings were given by OP-2 vide letter dated 08.06.2020 and by OP-5 vide letter dated 16.07.2020 to OP-6 stating that in case there is no buying utility willing to enter into a PSA with OP-6, they will continue to perform their obligations as per LoAs without creating any binding obligation on OP-6; (f) Vide letter dated 02.02.2021 and letter dated 18.02.2021. OP-2 and OP-5 respectively unilaterally reduced the quoted bid price to 2.54 kWh from 2.92 kWh against the spirit of MoP guidelines; (g) Vide letters dated 22.07.2021, OP-2 and OP-5 unilaterally gave undertaking for waiver of Basic Customs Duty for the capacity awarded under package 1; (h) Subsequently, OP-6 started signing PSAs with OP-7 onwards; (i) Subsequently, OP-6 signed 42 PPAs with OP-2 and subsidiaries of OP-1 and OP-2 and 24 PPAs with Special Purpose Vehicles of OP-5; (j) OP-5 has not even commenced the basic activities related to awarded project capacity and OP-6 has not cross checked the development of project activities on the part of OP-5; (k) OP-5 sent a letter to OP-6 on 07.12.2022 informing that 2333 MW projects are commercially unavailable due to non-fulfilment of the condition precedent on account of Public Interest Litigation (‘PIL’) vide no 237/2021 and PIL vide no 76 of 2022 before Hon’ble High Court of Andhra Pradesh and conditional regulatory approval by Central Electricity Regulatory Commission (‘CERC’). Neither any coercive actions have been taken by High Court of Andhra Pradesh against any of the parties nor any stay orders were passed against the Bidding process or against OP-6 as on date. On 19.01.2023, OP-5 and OP-6 met and discussed the letter dated 07.12.2024 and again on 21.12.2024, OP-5 sent a letter to OP-6 with new excuse that their lender's inability to finance 2333 MW projects and confirmed that they will continue with execution of 800 MW projects (package 1) along with 1 GW manufacturing facility; (l) Vide letter dated 02.03.2023, OP-5 has shown its intentions that 2333 MW projects capacity which was awarded to them, shall be transferred to other Bidder i.e. in present case is OP-2 only; (m) On 06.07.2023, OP-2, OP-5 and OP-6 had a meeting where they decided to transfer the 2333 MW projects capacity which was awarded to OP-5 to OP-2; (n) Vide letter dated 12.10.2023, OP-6 checked the final decision of OP-5 to clear their stand to transfer the 2333 MW Projects capacity to OP-2 by 16.10.2023. Vide letter dated 16.10.2023, OP-5 informed OP-6 that they are constrained to terminate the PPAs and requested to return the PBG of 116.65 Cr corresponding to 2333MW; (o) OP-6 in a hurried manner without even looking for any other person or interested party, have signed PPA for 1799 MW capacity with OP-2 which again shows that the whole bidding process was just a cover to allocate the entire bidding capacity of 2000 MW solar power plant with 2000 MG manufacturing project to OP-2; (p) On 23.02.2024, OP-6 have issued