Adani Power Ltd’s shares reached a new all-time high on April 3, extending gains for the fourth consecutive session amid increased trading volumes.
The stock surged by 5 percent to reach a record peak of Rs 611.75 on the BSE, following an 18.4 percent increase over the past four trading days. Year-to-date, it has risen by 15.3 percent, and over the last twelve months, it has soared by 214 percent.
Despite Adani Power’s market capitalization standing at Rs 2.33 lakh crore, the stock is covered by only one brokerage firm, Ventura Securities. It currently ranks 37th among all listed companies on the BSE, surpassing the market capitalization of companies like JSW Steel, Tata Steel, Siemens, IRFC, Varun Beverages, Bharat Electronics, Grasim Industries Ltd, and Zomato.
Adani Power’s subsidiary, Mahan Energen Ltd, recently inked a 20-year power purchase agreement with Reliance Industries for 500 MW. Under this agreement, a 600-MW unit from MEL’s Mahan thermal power plant will serve as the captive unit.
To meet policy requirements, Reliance Industries will hold a 26 percent stake in the captive unit, entailing an investment of Rs 50 crore for 5 crore equity shares of MEL. This exclusive agreement between the two companies ensures the long-term power purchase of 500 MW by Reliance Industries.
In its latest presentation, Adani Power outlined its plans to increase its power assets by nearly 6 gigawatts (GW) over the next five years, focusing primarily on thermal power generated from coal. Additionally, private Indian firms, including Adani Power, JSW Group, and Essar Power, have reportedly expressed interest in constructing approximately 10 GW of coal-fired power capacity over the next decade, as per Reuters.
These potential investments, previously undisclosed, suggest renewed interest in an industry that has faced financial challenges. However, the focus on coal-fired power expansion may conflict with efforts to reduce carbon emissions, despite the Indian government’s aim to attract private investment to increase coal-fired capacity by 80 GW by 2032.
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