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Adani Group shares in focus; Power, Green, Energy Solutions gain up to 12%

Shares of Adani Power, Adani Green Energy, Adani Energy Solutions, Adani Total Gas and Adani Enterprises have rallied between 5 per cent and 12 per cent, so far today

Adani group

Deepak Korgaonkar Mumbai

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Shares of Adani Group companies are trading higher by up to 12 per cent on the BSE in Tuesday’s intra-day trade amid heavy volumes. The top 5 gainers from the BSE 500 index are from the Adani Group. 
 
Adani Power, Adani Green Energy, Adani Energy Solutions, Adani Total Gas and Adani Enterprises have rallied between 5 per cent and 12 per cent so far today. Apart from that, Adani Ports and Special Economic Zone, ACC and Ambuja Cements are up in the range of 2 per cent to 3 per cent. In comparison, the BSE Sensex was up 0.31 per cent at 76,569 at 10:15 AM. Most of these stocks had seen a sharp correction in the past few days.
 
 
Among the individual stocks, Adani Power has rallied 12 per cent to Rs 506.05 on the back of an over two-fold jump in average trading volumes. As many as a combined 12.89 million equity shares have changed hands on the NSE and BSE. In the past two weeks, between December 30, 2024 and January 13, 2025, Adani Power had slipped 16 per cent. It had almost halved from its 52-week high level of Rs 896.75, touched on June 3, 2024.
 
CARE Ratings estimates earnings before interest, taxation, depreciation, and amortisation (Ebitda) of Adani Power to sustain above Rs 16,000 crore per annum for FY25 and FY26, given the long-term power purchase agreement (PPA) tie-ups, ramp up of the recently acquired plants, strong merchant realisations and overall buoyant power demand in the country.
 
Ratings are constrained on account of the company’s aggressive capital expenditure plans considering the stated goal of increasing operational capacity to 30 GW though organic/inorganic mode in the next 6-7 years. Capex for this expansion is estimated over Rs 1 trillion, including Flue Gas Desulphurisation (FGD) capex, which would be funded from internal accruals and external debt. The successful commissioning of plants without major delays/cost overruns and healthy operational performance shall be a key monitorable, the rating agency said in rationale.
 
Regarding the ongoing regulatory scrutiny on the group, markets regulator Securities and Exchange Board of India (SEBI) has completed 23 of 24 investigations into the Adani group and is expected to complete the pending investigation shortly. Negative outcomes from the conclusion of these investigations over Adani group adversely impacting financial flexibility of Adani Power will be a key rating monitorable, CARE Ratings said.
 
The brokerage firm also revised its outlook to stable on Adani Enterprises, in view of the indictment and civil complaint filed by the United States Department of Justice (DoJ) and United States Securities and Exchange Commission (SEC), on chairman of Adani Green Energy Solutions, Gautam Adani, who is also the chairman of Adani Enterprises and its impact on large-sized capex as well as fundraising plans of Adani Enterprises. However, in the medium-term, financial flexibility is supported by prospective equity dilution in one of the listed group entities, Adani Wilmar, besides the strong monetisation potential in airports and road segments, the rating agency said.
 
The complete stake sale of Adani Enterprises in Adani Wilmar is expected to lead to cash inflow of over Rs 15,000 crore in more than one tranche. The transaction, comprising an Offer for Sale (OFS) and the sale of stake to joint venture partner Wilmar International, is set to be completed by March 31, 2025.
 
Adani Enterprises said it will use the proceeds from the sale to turbocharge its investments in the core infrastructure platforms in energy and utility, transport and logistics, and other adjacencies in primary industries. Adani Enterprises will continue to invest in infrastructure sectors, which will further strengthen the company’s position as India’s largest listed incubator of platforms playing the key macro themes underpinning India’s growth story, the company said.
 
According to Ventura Securities, the proceeds, which could be leveraged for 2.0x debt, will enable Adani Enterprises to raise additional debt of Rs 35,000–36,000 crore, creating a formidable Rs 50,000– 52,000 crore corpus. This war chest is poised to supercharge Adani Enterprises' growth across its core infrastructure verticals, including the green H2 ecosystem, airports, data centers, roads, and primary industry-adjacent businesses. 
 
The funds will also bolster Adani Enterprises' incubation capabilities and sharpen its focus on consumer services under the Airports vertical and the Adani Digital platform, which already caters to a vast consumer base of 350 million.
 
This deal is set to further improve the Adani portfolio’s net debt-to-Ebitda ratio, currently at 2.4x, solidifying the group’s financial resilience. With the war chest ready, Adani Enterprises is poised to reassert its leadership in infrastructure and consumer services while reinforcing its growth story in an era of renewed investor confidence, the brokerage firm said.
 

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First Published: Jan 14 2025 | 11:16 AM IST

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