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Adani Power Ltd.

BSE: 533096 Sector: Infrastructure
NSE: ADANIPOWER ISIN Code: INE814H01011
BSE 00:00 | 27 May 328.35 14.10
(4.49%)
OPEN

327.10

HIGH

329.95

LOW

315.00

NSE 00:00 | 27 May 328.10 13.80
(4.39%)
OPEN

325.30

HIGH

330.00

LOW

315.00

OPEN 327.10
PREVIOUS CLOSE 314.25
VOLUME 1539148
52-Week high 343.80
52-Week low 69.95
P/E
Mkt Cap.(Rs cr) 126,643
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 327.10
CLOSE 314.25
VOLUME 1539148
52-Week high 343.80
52-Week low 69.95
P/E
Mkt Cap.(Rs cr) 126,643
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Adani Power Ltd. (ADANIPOWER) - Chairman Speech

Company chairman speech

Dear Stakeholders

The Webster definition of resilience is "the capability of a strained body torecover its size and shape after deformation caused especially by compressivestress". It's hard to believe that it was less than three months ago on March 112020 that the World Health Organization declared the outbreak of COVID-19 as a pandemicmeaning COVID-19 has spread worldwide. If there ever has been a time when the need forglobal resilience has been critical it is now.

The Power to Overcome

At times like this one looks for inspiration. In this context Wayne Muller awell-known author writes that for thousands of years humankind has suffered famine warplague hunger and countless injustices; it has experienced numberless births and deaths.Each community of people has had to find some way to speak about what sustained them orbrought them grace—even in the midst of terrible sorrow. We have struggled to namethis human trait the universal force that makes the grass improbably push its way throughconcrete the force that turns the earth the energy that we seem to possess and blessesall life the essential presence in our deepest nature that can never be spoken of withperfect accuracy but yet make us what we are. History is one big story of humanovercoming. It's what we are born to do.

Decisive Governance

What we must realise is that there are no absolute right or wrong ideas. What isrequired during an unprecedented hard to model crisis like COVID-19 is a Governmentthat is willing to make decisions based on best available information at a given point oftime and constantly adapting as new information becomes available. For this the IndianGovernment and bureaucracy must be complimented. Countries with greater resources thanours have struggled and while our battle with the virus is far from over I have nohesitation in stating that had the decisions that got made been delayed we could have beenfacing an unmitigated disaster that would not just impact India but have globalramifications. Yes business has suffered immensely lives and jobs have been lost andthe migrant worker crisis saddened the entire nation but the consequences of the unknownalternates would be far grimmer. What the leaders of our nation the doctors thehealthcare workers the police the army the small street side vendors and the citizenshave done to support each other is truly what defines India and its resiliency. Add tothis the fact that the Government is are now able to do direct benefits transfer as aresult of the integrated approach it has built through the Jan Dhan Aadhaar and Mobilelinking systems and we start seeing the benefits of a Government that had the vision toput in place the infrastructure we need to be able to handle a crisis.

The Possibilities

Sitting where we are today I can say that history is in process of being scripted. Iwill be the first to admit that I have no way of predicting the short or mid-term possibleeconomic outcomes as a result of COVID-19. However there cannot be any denying the factthat India over the next several decades will be a market continuously on the up and onethat simply cannot be ignored. It will be one of the world's top consumption centersmanufacturing and service hubs and a beacon of stable democratic governance. If there wasa time to make a bet on India there may not be a better time than now. What I can predictis that on the other side of this crisis will emerge massive new opportunities willemerge great new leaders will emerge terrific businesses and will emerge a few strongernations. Those that succeed will be the ones that understand that resilience is built onthe other side of the tunnel of crisis and we are already getting ready for this.

Resilient Group Performance

I am pleased to report that each one of our six publicly traded companies has performedwell even as we started to confront the trying circumstances following the first few weeksof 2020. While we may have to do need-based course correction in our strategies in thewake of the challenge that we are facing the roadmap remains clear. Our businesses areclosely aligned to the lifeline of the economy providing essential services to enhancethe quality of life of citizens and addressing critical national infrastructurepriorities. We look at our Group companies as individual growth drivers that complementeach other's strengths.

Any shock to a system always helps drive home some key points and what the Indianbusinesses have learnt over the past few years and most certainly post COVID-19 is thevalue of an optimal and perhaps for some sectors a conservative capital structure as wellas the criticality to have systematic risk mitigation plans in place. Both optimal capitalstructures and risk mitigation is a part of the maturing of the business philosophies asthey grow in size and lays the foundation for stability as well as consistent valuecreation. At the Group level our focus is on optimising capital utilisation redesigningthe organisational structure to minimise risk in our businesses and funding operations inphases. I am happy to share that during the year the Group has been able to bringstrategic global equity partners in Adani Gas Adani Green Energy Ltd and Adani MumbaiElectricity Ltd. The total investment is USD 1.6 Billion; and will help drive futuregrowth of our businesses. It is also pertinent to mention that AEML (part of AdaniTransmission) recently completed an investment grade USD 1 Billion bond issuance thefirst by a private integrated utility from India.

The issue generated significant interest from international investors and wasoversubscribed by 5.9 times. I must also mention here that APSEZ raised USD 750 Million byselling overseas bonds the proceeds from which would be used for fund expansion andfurther reduce the cost of debt and progressively further deleverage the balance sheet. Inthe preceding 12 months the Group has successfully placed seven bonds in theinternational markets totaling to 4.26 Billion USD.

Adani Power Continues to Execute on its Strategy

Over the last decade India's power demand has grown at an average annual rate of 4.5%which is slower than its GDP growth rate. This dichotomy is explained by the preponderanceof the service sector led growth and the fact that vast swathes of the population were notconnected to power grids. On the other hand energy and peak deficits which wereunsustainably high at 10% and 12.7% respectively in FY 2009-10 have come down to 0.5% and0.7% respectively in FY 2019-20.

The removal of this hurdle which held back India's economic growth and the well-beingof its people for decades was possible only with the contribution of the private sectorin generation capacity growth aided by various supportive policies of the Government andwe have had the opportunity to have played a significant role as the largest private powerproducer in the country. While we are looking at disruption to economic activity caused bythe impact of an elongated lockdown in the post COVID-19 world the realisation that ournation must grasp an emerging one time opportunity to strengthen its industrial base byincreasing its self-reliance from domestic manufacturing as well as by attractinginvestments into export-oriented high value-added sectors could be a potential gamechanger in accelerating the demand for power.

Economic Measures - A

Significant Opportunity

Various economic reforms which have been announced recently to get the economyjumpstarted makes me optimistic about the possibilities. I am quite confident that withefficient implementation and appropriate incentives that have been announced we can notonly get the economy back on the growth path but also become a major centre for exportsof manufactured goods globally. I also expect that this could revitalise the power demandand set the stage to begin the next phase of investment growth in the sector.

I continue to remain steadfast in my belief that base load power at least for severalyears to come will depend on fossil fuels. The renewable energy transition continues toaccelerate and the focus should be on doing this as cleanly as possible given thetechnologies that are now available. India is the only major nation that is ahead of itscommitments made under COP 21 at Paris in 2015. As a growing major economy it needs toutilise all sources of energy to reach its development goals. India is expected to achievetwo of the three commitments made under the Paris Agreement viz. reducing GHG emissionintensity increasing penetration of renewables and creating an additional carbon sink inthe form of green cover a full decade before the 2030 deadline. As one of the fastestgrowing renewable energy groups in the world we fully recognise that the intermittency ofsolar and wind generation preclude their displacing thermal power as the mainstay ofIndia's demand-driven power needs. Coal-based electricity is needed to provide both thebase load capacity as well as spinning reserves for greater integration of renewablestill affordable and reliable storage technologies emerge.

Therefore it is not a trade off as much as it is giving an entire segment of ourpopulation that needs affordable power a fair chance to be better integrated into thesociety. We have been at the forefront of the Adani Group's efforts to provide the motiveforce of electricity to make this happen as well as help drive India's economic growthengine. We have also strengthened our competitive position by implementing expansionthrough both organic and inorganic means. Our efforts to improve regulatory certainty ofour operations and enhance visibility of future earnings are starting to bring fruit andwe have started receiving long awaited regulatory payments. In addition we have continuedto put in place world class capabilities as well as monitoring facilities that ensure ourpower plants are world class in terms of emissions as well as efficiencies. While we havehad challenges over the next two years we expect to fully realise the outcome of theseefforts and I am confident of seeing us transform into a financially stable andprofitable organisation.

Group's Sustainability Journey

Our journey towards sustainability accelerated over the past 12 months. We are nowleading the clean energy transformation taking place not just in India but globally andour Group is building one of the largest integrated energy portfolios. Our vision is tobecome the world's largest solar power company by FY25 and the largest renewable powercompany by FY30. I must mention here that our Group and total signed definitive agreementsto deepen our existing partnership and commitment for developing multi-energy offeringsfor the Indian energy market. We are fully committed to supporting our nation indiversifying its energy mix through partnerships in natural gas and solar energy.

Growth with Goodness

We at the Adani Parivar are fighting the COVID-19 battle unitedly.

Our Foundation has contributed Rs 100 Crore to the Prime Minister's Citizen Assistanceand Relief in Emergency Situations Fund (PM CARES Fund). I am equally grateful to ourworkforce in India for contributing Rs 4 Crore for the battle against COVID-19. It isbecause of the solidarity demonstrated by this workforce of over 17000 people that ourFoundation could add another Rs 4 Crore collectively contributing another Rs 8 Croretowards COVID-19 relief projects in India. As a responsible corporate we will continue tostand by the nation in various capacities in this hour of need. On that note I must alsotake this opportunity to thank our teams for the following measures:

• Adani Foundation contributed Rs 5 Crore to the Gujarat CM-Relief Fund and Rs 1Crore to the Maharashtra CM Relief Fund; we have also contributed to Kattupalli DistrictCollector COVID-19 Fund and the Bhadra District Administration.

• The Foundation is also contributing to the CM-Relief Funds of many other statessuch as Kerala Jharkhand Andhra Pradesh.

• Women cooperatives aided by Adani Saksham produced more than 1.2 lakh masks tohelp economically disadvantaged sections of the population.

• Gujarat Adani Institute of Medical Sciences (GAIMS) is the only hospitalequipped for handling COVID-19 cases in Kutch India's largest district.

In times such as this the spirit and compassion of our people reinstates my belief inour core philosophy of Growth with Goodness. Let all of us contribute to help our nationrise above this crisis. It may take time but there is ample optimism to show that it ispossible.

Together we will stay resilient and hopeful in these testing times.

Gautam Adani

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