According to the reports, Bharti Airtel has acquired around a nine per cent stake in renewable energy firm Avaada Clean TN Project for about Rs. 7.88 crore in an all-cash deal.

Airtel acquired a stake in Avaada to comply with regulatory requirements for captive power plants under the provisions of Electricity Act 2003 and Indian Electricity Rules 2005 and procurement of cost-effective renewable energy, as per reports.

Reports suggest that, Rs. 7, 88, 51,500 in aggregate for the acquisition of aggregate 78, 85,150 equity shares of Rs. 10 each.

Avaada is a subsidiary of Avaada Energy Private Limited (formerly known as Giriraj Renewables Private Limited), primarily engaged in the business of development and generation of energy and establishing, commissioning, setting up, operating and maintaining electric power generating stations based on conventional/nonconventional resources and setting up of infrastructure projects on Engineering, Procuring and Constructing (EPC) contract basis.

Airtel is credited with pioneering the business strategy of outsourcing all of its business operations except marketing, sales and finance and building the 'minutes factory' model of low cost and high volumes. The strategy has since been adopted by several operators. Airtel's equipment is provided and maintained by Ericsson, Huawei, and Nokia Networks whereas IT support is provided by Amdocs.

Shares of Airtel closed at Rs.697.55 apiece on the BSE, up 0.88 per cent from the previous close.

“It will act as 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,” Airtel adds.