News

Published: August 18, 2023
Updated: August 18, 2023

Adani Group Stocks Surge as TAQA Considers Major Investment in India's Power Sector

Shares of Gautam Adani group companies witnessed a significant surge of up to 12% with strong trading volumes on the BSE, even amidst a broader market decline. The rally was propelled by the news of potential interest from Abu Dhabi National Energy PJSC (TAQA) in expanding its exposure to India's expansive power sector, particularly within Gautam Adani's diversified businesses.

Adani Power and Energy Solutions Take the Lead:

Adani Power, Adani Green Energy, and Adani Energy Solutions were among the top performers, registering gains of 12%, 10%, and 9% respectively. Other entities such as Adani Enterprises, Adani Wilmar, and Adani Total Gas also posted robust gains, climbing by 7% during the intraday trade. Notably, Adani Ports, Ambuja Cements, ACC, and New Delhi Television recorded increases ranging from 2% to 5%. In contrast, the S&P BSE Sensex experienced a decline of 0.35% at 64,922 during midday trading.

TAQA's Interest and Synergy:

According to credible reports, TAQA is contemplating a substantial investment in the diverse power businesses of Gautam Adani. The range of these businesses encompasses thermal generation, transmission, clean energy, and green hydrogen. The investment firm is reportedly aiming to allocate between $1.5 billion to $2.5 billion across various Adani Group companies or within a single entity. Sources suggest that the maximum synergy could be achieved through a strategic alliance between TAQA and Adani Energy Solutions, opening avenues for collaborative projects in North Africa and West Asia.

Adani Power's Impressive Surge:

Adani Power experienced an impressive rally of 12% during intraday trade, reaching Rs 321, its highest level since January 2023. This surge followed Australia-listed investment firm GQG Partners' infusion of $1.1 billion (approximately Rs 9,000 crore) through the acquisition of an 8.1% stake in Adani Power via multiple block deals. Notably, the company has an installed capacity of 12,450 MW distributed across various locations, engaged in long-term Power Purchase Agreements (PPAs), trading, investments, and other business activities.

Expansive Power Projects Underway:

Currently, Adani Power and its subsidiaries operate multiple power projects across various locations, boasting a combined commissioned capacity of 14,450 MW, with an additional 800 MW under commissioning as of the year-end. These projects operate under a mix of long-term Power Purchase Agreements (PPAs), medium-term PPAs, short-term PPAs, and merchant basis arrangements, as highlighted in Adani Power's FY23 annual report.

Anticipating Robust Growth in India's Electricity Demand:

Adani Power envisions strong growth in India's electricity demand, driven by the government's 'Make-In-India' initiative, the Production Linked Incentive (PLI) Scheme, expanding industrialization, rising incomes, improved living standards, and the push for electric vehicle adoption in the transportation sector.

Mundra Solar Energy Limited's Achievement:

Adani Enterprises recently shared news about its subsidiary, Mundra Solar Energy Limited (MSEL), securing the commercial operational date (COD) certificate from the Solar Energy Corporation of India for a Solar PV Cells and Solar PV Modules manufacturing plant located in Mundra, Gujarat. This state-of-the-art facility boasts a capacity of 2.0 GW per annum and is backed by Adani Enterprises, which holds 74% of MSEL's shares through its wholly- owned subsidiary, Adani Tradecom Limited.

The soaring performance of Adani Group stocks amidst a challenging market environment has been fueled by the prospects of a significant investment by Abu Dhabi National Energy PJSC (TAQA). With TAQA's keen interest and potential alliance with Adani Energy Solutions, the Indian power sector appears poised for further expansion. The growth potential, particularly in the context of India's increasing electricity demand and supportive governmental initiatives, positions Adani Power and its affiliated companies on a promising trajectory.