Adani Power, a prominent player in the energy sector, is set to significantly boost its capital expenditure by over 60%, aiming for a total of ₹13,000 crore in the current financial year. This ambitious plan is part of the company’s strategy to expand its power generation capacity from 17.5 GW to 30.67 GW by 2029-30. In FY25, Adani Power had already invested ₹8,000 crore, showcasing its commitment to growth.
Funding Strategy Driven by Strong EBITDA
In a recent investor call, Adani Power’s Chief Executive, SB Khyalia, revealed that the company plans to finance this expansion primarily through internal accruals, thanks to its robust EBITDA. This approach underscores the firm’s confidence in its financial stability and future profitability.
- Investment Plans:
- Adani Energy Solutions: ₹18,000 crore in FY26.
- Adani Green Energy: ₹31,000 crore in FY26.
Recent Financial Performance
Despite a slight dip in profitability, Adani Power reported a net profit of ₹2,649 crore in the fourth quarter of FY25, representing a 3% year-on-year decrease. However, the company saw its revenues increase by 6.5%, climbing to ₹14,237 crore from ₹13,364 crore in the previous year.
Dilip Jha, the company’s Chief Financial Officer, noted that they are actively developing six sets of 2X800 MW ultra supercritical units at various sites, including Raipur, Raigarh, Kawai, Mahan, and Mirzapur. The orders for the necessary boiler, turbine, and generator (BTG) have already been placed.
Strategic Acquisitions and Expansions
Adani Power is on the verge of finalizing the acquisition of the 600 MW Vidharbha Industries Power plant in Butibori, Maharashtra, as the National Company Law Tribunal (NCLT) resolution process nears completion. Additionally, the expansion of its 2,920 MW Korba project, previously known as Lanco Amarkantak, is anticipated to finish by the end of the current financial year or early in the next.
Strong Demand for Thermal Power
Khyalia emphasized that the demand for thermal power remains robust, particularly as the government has revised its forecast for new thermal capacity from 80 GW to 100 GW. The company expects a strong demand for merchant power in FY26 amid rising demand and slower thermal capacity additions. Currently, about 90% of Adani Power’s capacity is secured under long-term Power Purchase Agreements (PPAs), with the remainder available for sale in the open market.
In FY25, the company’s merchant realization decreased to ₹5.93 per unit, down from ₹6.92 per unit in FY24, while the PPA tariff averaged ₹5.60 per unit. During this period, Adani Power generated and sold a staggering 102 billion units of electricity.
Positive Outlook on Coal Supply and International Payments
Khyalia expressed confidence in securing additional PPAs for upcoming capacity, stating, “Coal supply is not a challenge… there is plenty of coal available in the open market.”
Regarding international operations, particularly in Bangladesh, Adani Power reported an outstanding amount of approximately $900 million, including late payment charges. Nevertheless, Khyalia noted an improvement in the situation, as the outstanding amount decreased by around ₹500 crore in the last quarter. He remains optimistic, stating, “We are confident that our old outstanding will get liquidated soon,” while affirming that full power supply to Bangladesh continues without interruption.
In summary, Adani Power’s strategic investments, robust demand for thermal power, and proactive financial management position the company favorably for future growth and stability in the energy market.
