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There are various static var compensator configurations are available and listed in the literature. Their performances are evaluated based on their voltage support, dynamic response, losses, cost, and additional filter requirement, if any. In this paper, efforts are made to improve the dynamic performance parameter such as rise time, settling time, and peak overshoots. A new topology with an adaptive controller is presented, in which capacitor and reactor banks are divided in their binary values and connected in the shunt. Capacitor and reactor banks are operated by thyristorised switches. Both these banks are operated in closed-loop form as a cascade control. Amongst these, capacitor bank operates as coarse control, and reactor bank acts as fine control. For the performance enhancement, a model reference adaptive controller is used. The system identification toolbox is used to evaluate the mathematical model of the plant with Matlab. The model's performance was analyzed deeply by the adaptive controller with different reference models such as critical, under, and overdamped. The performance parameters such as rise time, settling time, and peak overshoot in the form of reactive power swings, are evaluated and plotted for different adaptive gains using MIT rules.