Adani Group Analysis : Adani Green Energy Limited Ltd

I hope this article finds you and your loved ones safe and happy. Part 2 of our series explaining Adani Group Companies. This one covers the business of Adani Green Energy Limited.

Part 1 of our series explaining Adani Group Companies. That one covers the business of Adani Ports and SEZ limited. Click on the link to visit there.

Adani Group

Refer Part 1 of the series for more info about the adani group.

Adani Green Energy

Adani Green is India’s largest renewable energy company and the world’s largest solar power producer. The company develops, builds, owns, operates and maintains solar and wind electricity generation systems. It sells the power generated from its solar and wind electricity generation system to central and state government entities and government backed PSUs.

The company submits bids in renewable energy auctions conducted by Solar Energy Corporation Of India Limited ( SECI ) that award projects based on lowest tariff. It sells the generated energy through the fixed power purchase agreement for 25 years.


Market Cap

₹ 164,957 Cr.

Current Price

₹ 1055

Book Value

₹ 13.8

High / Low

₹ 1342 / 200


₹ 1.31

PE Ratio


Dividend Yield

0.00 %

PB Ratio



3.41 %


8.23 %

adani green stock price chart

Adani Green Energy 5-year stock price chart

adani green stock performance
Source : Stockedge Mobile App ( Returns in % )

The company currently has an installed capacity of 3.5GW, with a presence across 11 states. Most of these assets have been built by the company, when it was part of Adani Enterprises and some of it via acquisitions. Recently the company acquired solar assets from Hindustan Power Projects, Sterling & Wilson and from SkyPower Global.

Initially the company finances the project by equity funding and internal accruals and post commissiong of the solar project it gets refinanced from PFC, REC , structured debts or from strategic investors to free up the shareholders fund and for efficient capital management.

Within its renewable energy assets, 2.35GW of capacity is under a 50:50 joint venture with Total SA which has invested ₹ 4,000 in two phases for a 50% stake.

It currently has 2.9GW (Solar 50MW, Wind 1.2GW & Hybrid 1.6GW ) of project under construction which will be ready for commissioning within 5-12 months. There is a development pipeline of around 8.6 GW.And company has emerged as L1 bidder in 4.8GW project. Post development of all these projects, Company solar energy assets adds up to 20GW approximately and management’ target is 25GW installed capacity by FY25. This means that the company needs to win orders worth 5GW only in 4 years.

adani green electricity generation capacity
Source: Company

adani green plant data

Adani Green aims to increase its current capacity by seven times in nearly 4 years. Adani Green is focused on tapping the opportunity of the Government of India , Paris Climate accord which provides that GOI will develop 175GW of renewable energy projects by FY 2022 and post this GOI will add the capacity up to 450GW by FY2030.

Adani Green’s current contracted capacity is at a fixed rate for 25 years and 78% of contracted capacity is tied up with the sovereign government and while remaining with state government and private players, refer below diagrams for detailed understanding. Average Contracted Capacity tariff: ₹ 3.26/unit.

adani green portfolio breakup

Source : Company Presentation

Once a renewable energy plant is commissioned, the ongoing Operation & Maintenance cost is very low and the electricity generated is of course 100% free Therefore the EBITDA stands at ~90%.

Adani Green is focusing constantly on technology upgradation to improve their operation and management activity. For O&M, they have developed Energy Network Operation Center ( ENOC ) , a centralised management of all Adani Green plants using Data Analytics, AI , Business Intelligence based software. This centralised O&M center will reduce cost vs. when managed individually and improve efficiency of the renewable energy generation plants.

Land acquisition is a critical part of any renewable energy company’s growth plan. A company requires 3-5 acres to produce per MW of solar and wind energy. The government has allotted 70,000 acres to Adani Green in Gujarat, which can house 15 GW of projects. This prepares the company for the next stage of growth as the existing planned 25 GW has the needed land bank.

Management believes economies of scale on overheads and O&M expenses with 15 GW at one site will make it competitive vs industry peers. Management focus to build a plant with GW+ capacity for better management and reduced cost. In the coming future, we may see some big solar and wind parks with huge capacity. Adani Green is using the technology and also reducing the land requirement / MW. For instance, in FY 15 5 acre land is required per MW but in FY 20 only 3.5 acre land is required per MW which is approx a 35% reduction in the land requirement, which indeed leads to saving in land acquisition cost.

Financial Snapshot

adani green financials

The company has a total debt of Rs.19,700 crore which is pretty high. Nearly three-fifths of the debt is in Indian currency while the remaining in foreign.The financial of the company looks completely messed up. Debt Service Coverage Ratio is below the benchmark of 1, Current Ratio is completely in the worst case.

Risk in Adani Green

The key risk to Adani Green’s ambitious growth plans is competition and reducing renewable tariffs and solar panel technology is still evolving as a result, A host of private players like Tata Power, Acme, Azure, Renew Power, Greenko, and PSU giant NTPC are trying to make their mark in the renewable space.

Because of the rising competitive intensity, in the past three to four years, renewable energy tariffs discovered during competitive bidding have declined by nearly 28%. The most recently discovered tariffs have ranged between ₹ 2-2.3/kWh, well below Adani Green’s current portfolio average tariff of ₹ 3.24/kWh. Higher competitive intensity might thus affect return ratios and/or bid success rate for Adani Green in the coming years.

electricity cost per unit
Source : Company




  • India’s largest renewable energy company and world largest solar power producer.
  • Strong Promoters and Adani group sponsorship.
  • Improving cash flow from operation over the past 2 years. .
  • Huge Debt in Books.
  • High Finance Cost over EBITDA.
  • Valuation is quite high.



  • Adani Green is well positioned to capitalise the Indian government initiative 450GW renewable energy capacity by FY 2030.
  • It can monetize its assets by creating infrastructure trust or JV etc to reduce debt in company financials .
  • Due to huge competition price of tariff is reducing constantly creating pressure on the company.
  • Solar cells technology is still evolving and any major development can cause harm to company current assets capacity .

In the Next Article, we take a look at a company raising a lot of eyebrows with its business and stock price :Adani Total Gas.

Part 1 of our series explaining Adani Group Companies. That one covers the business of Adani Ports and SEZ limited. Click on the link to visit there.

This article is for information only, and should not be considered as a recommendation to buy or sell any stocks. Stocks discussed might be part of our holding or recommended to our client.

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