Adani Power up 6% in 2-days, hits 7-mth high after GQG Partners stake buy

Promoter Adani family had sold an 8.1 per cent stake, or 312 million equity shares, at an average price of Rs 279.17 per share.

Shares of Adani Power hit seven-month high of Rs 297.10, up 4 per cent on the BSE in Friday’s intra-day trade in an otherwise a subdued market. The stock of Adani Group integrated power utilities company was quoting at its highest level since January 2023. In comparison, the S&P BSE Sensex was down 0.39 per cent at 64,899 at 09:49 am.

In the past two days, the counter has rallied 6 per cent after Australia-listed investment firm, GQG Partners, invested $1.1 billion (Rs 9,000 crore) in Adani Power by buying an 8.1 per cent stake from the Adani family via multiple block deals.

According to bulk deal data available with the exchanges, GQG Partners Emerging Market Fund (49.03 million shares), Goldman Sachs GQG Partners International (103.03 million shares) and a few other investors picked up a stake in Adani Power.

Promoter Adani family held 74.97 per cent, or 2891.6 million equity shares in the utility company. It sold an 8.1 per cent stake, or 312 million equity shares, at an average price of Rs 279.17 per share. The proceeds will be used by the Adani group to reduce its debt and for other general corporate purposes.

With past two days' gain, the stock price of Adani Power has bounced back 124 per cent from its 52-week low of Rs 132.55 touched on February 28, 2023. It had hit a 52-week high of Rs 432.80 on August 22, 2022.

Adani Power has installed capacity of 12,450 MW (which includes 40 MW solar power project) at multiple locations i.e. Bitta, Mundra, Kawai, Tiroda, Udupi, Raipur, Raigarh. The Company sells power under long term Power Purchase Agreement (PPAs), medium term PPAs, short term PPAs, on merchant basis and also engaged in trading, investment and other business activities.

The Company, together with its subsidiaries currently has multiple power projects located at various locations with a combined installed and commissioned capacity of 14,450 MW and another 800 MW under commissioning as of year end. The Company, together with its subsidiaries sells power generated from these projects under a combination of long term Power Purchase Agreements (PPA), medium term PPAs, short term PPAs and on merchant basis.

Adani Power in its FY23 annual report said, the company expects to report a stronger operating performance due to improved power demand and stronger resource linkages. Besides, the commissioning of the Godda power plant is expected to enhance revenues starting from the current financial year. The recent regulatory approvals will also enable it to recover alternate fuel costs efficiently under longterm PPAs, while improving cash flows due to faster collections.

Demand for electricity in India is expected to grow at a sustained pace given the government’s massive push towards ‘Make-In-India’, PLI (Production Linked Incentive) Scheme, increasing industrialization, improving incomes and standards of living, and push for increasing the penetration of electric vehicles in the transportation sector, among others, Adani Power said.