Mumbai, Sept. 9 -- Adani Power Ltd (APL) has made distressed assets a key plank of its expansion, emerging as one of the top acquirers under India's decade-old bankruptcy law. Its proposed takeover of GVK Energy Ltd would be its eighth through the insolvency process, a strategy that has allowed the country's largest private thermal power producer to add capacity at a fraction of the cost of building from scratch, and turn several stranded plants into cash-generating assets.

A third of Adani Power's 18.3-gigawatt (GW) operational capacity today comes from companies it acquired under the Insolvency and Bankruptcy Code, 2016 (IBC). The company bought these assets at a significant discount to what it would cost to create new capacity, giving...