Adani Green’s promoter entity converts remaining warrants into equity
Business Business: Ardor Investment Holding – an entity of the Adani promoter group – has completed the conversion of warrants for renewable energy major Adani Green Energy (AGEL) into equity, which market sources are interpreting as a sign of ‘commitment and confidence’ by the Adani family in the company.
The warrants were issued to the promoter group at Rs 1,480.75 per unit for a 25 per cent upfront payment in January 2024, and now, following board approval, the balance amount was paid on conversion at Rs 1,110.56 per unit on July 18.
Following a report on the Adani Group by now-defunct market research firm Hindenburg in January 2023, the promoters had reduced their stake in AGEL from 60 per cent to around 56 per cent. The reduction in promoters’ stake in AGEL was due to stake sales to private equity and sovereign wealth fund GQG Partners and Qatar Investment Authority (QIA), respectively.
This fresh investment by the promoter entity takes its stake in AGEL to 62.5 per cent, and comes at a time when the group has planned a capital expenditure of $100 billion over the next five years. In FY26 itself, AGEL plans to add 5 gigawatts (GW) of renewable energy capacity, which will entail a capital expenditure of about Rs 31,000 crore.
Currently, AGEL has an installed capacity of around 15.8 GW, which is expected to reach 19 GW by the end of the fiscal year. The company has signed power purchase agreements (PPAs) for an additional 16 GW of capacity, sources told Moneycontrol.
Most of AGEL’s capital expenditure plans relate to a targeted capacity of 50 GW by the end of the decade, more than half of which will be installed at the Khavda Solar Park in Gujarat, the largest solar park of its kind in the world and located less than 20 kilometres from the international border with Pakistan. At Khavda, AGEL plans to install 30 GW of capacity – primarily solar – which will also include wind power assets. AGEL also plans to expand its capacities or set up new capacities in Rajasthan and Andhra Pradesh.
AGEL is also relying on group synergies to reduce overheads and increase margins, and is focusing on buying solar panels, wind turbines and energy storage solutions from group firms such as Adani New Industries, which is under the group’s flagship company and incubator Adani Enterprises.
Of the Rs 9,350 crore the company received from the promoters, AGEL plans to use around Rs 6,200 crore for growth capital and other corporate purposes. The company plans to spend Rs 3,116 crore to repay debt, and aims to ‘maintain strict debt discipline’ while continuing to grow while generating cash flows.
In FY25, the company’s net debt-to-EBITDA ratio declined to 6.57 times from 6.05 times earlier, and AGEL plans to further reduce this ratio to 4 times by FY28. According to market observers, if the FY28 net debt-to-EBITDA ratio target is achieved, AGEL will become one of the lowest debt companies globally, in an industry that requires high levels of capital expenditure.
