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Why Adani Green shares skyrocketed 140 per cent in three months?

Adani Green, which has 2420 MW of solar and wind power units in operation, is building another 2,870 MW capacity, including hybrid power

twitter-logo Nevin John        Last Updated: December 17, 2019  | 00:28 IST
Why Adani Green shares skyrocketed 140 per cent in three months?

In a bid to create a 15,000 mega watt (MW) renewable energy basket by 2025, Adani Green is eyeing organic as well as inorganic opportunities across the world and raising capital including from dollar bond market to fund the growth plan. The company, which has 2420 MW of solar and wind power units in operation, is building another 2,870 MW capacity, including hybrid power.

For these reasons and more, the company's share price has been skyrocketing compared to its rivals. The share price of Adani Green has risen over 140 per cent to Rs 134 in the last three months. It means, the investor, who put Rs 1 lakh in Adani Green three months back, would have grown his investment by 140 per cent to Rs 2.4 lakh at present. The company listed in June 2018 has been valued Rs 21,000 crore in the stock market. The major reason for its rise:

Adani Green has the advantage compared to its peers as it signed power purchase agreements (PPAs) with the government counterparties to sell its entire power for 25 years at fixed tariff.

The latest information is that the company is in talks to acquire 480 MW solar projects, which is under construction, from Essel Group. It had signed an agreement in August to acquire the 205 MW of operational solar assets of Essel for Rs 1,300 crore. At the last deal valuation, the cost of 480 MW would be around Rs 3,000 crore.

The company has recently raised $362.5 million from the dollar bond market for refinancing the existing loans and find capital for the acquisitions and Greenfield projects. As on 30th September, the gross debt stood at Rs 13,015 crore (excluding Inter Corporate Deposit and IND AS adjustment) and net debt at Rs 10,966 crore.

The revenue went up by 46 per cent to Rs 1,349 crore in the first six months of this financial year and posted a profit of Rs 5 crore compared to Rs 262 crore losses in the same period last year. EBITDA for H1 FY20 increased by 9 per cent to Rs 918 crore on account of increased operating capacity. EBITDA margin during H1 FY20 was 89 per cent.

The group has won bids for 130 MW wind and 600 MW hybrid power projects in the first half. Post completion of all the projects under construction, the group's operational capacity would increase to 5,290 MW in two years.

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