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It’s been a stellar past year for Adani Green Energy Ltd (AGEL). Its share price has surged nearly 4X, closing at an all-time high of Rs 1,300 ($18) on 21 May. In September, it was even anointed the world’s largest solar energy developer.

The cherry on the cake was its May acquisition of SoftBank’s clean energy unit in India, SB Energy Holdings, for an enterprise valuation enterprise valuation Enterprise valuation Enterprise valuation is a company's market cap plus debt minus its cash of $3.5 billion. With SB Energy’s 5 gigawatt ( GW GW GW 1 GW = 1,000 megawatt ) of solar and wind projects, AGEL’s total portfolio of 24.3 GW is more than double that of its closest competitor—Goldman Sachs-backed ReNew Power. “Adani is in a different league when it comes to financing,” says a former executive with SB Energy. They and other officials working with clean energy companies The Ken spoke to requested anonymity as they did not want to be seen commenting on AGEL.

Just months earlier, in March, AGEL raised $1.35 billion $1.35 billion Mint Adani Green raises $1.35 bn in debt funding from foreign banks Read more in debt from 12 international banks to finance its projects. It’s as if AGEL is free of the limitations that other clean energy companies have in taking on large projects or in acquiring portfolios like SB Energy’s. With a market capitalisation of roughly Rs 1,94,000 crore ($26.5 billion), AGEL is the most valuable company of the Adani Group, which is headed by Asia’s second-richest person, Gautam Adani.

AGEL’s initial lustre, however, is finally starting to dull.

Just 20% of AGEL’s portfolio is operational, compared to 55% for ReNew. AGEL’s expansion plans are partly dependent on selling stakes in commissioned projects. It did just this with French energy major Total SA last year. Total has invested over Rs 4,000 crore ($550 million) in a 50:50 joint venture (JV) with AGEL that houses 2.4 GW of the latter’s operational assets. Total also owns a 20% stake in AGEL.

Monetising power-generating projects frees up capital AGEL can then use to acquire or bid for new projects. But AGEL is faced with uncertainty over the biggest project in its portfolio—an 8 GW solar tender the company won last year at a tariff of Rs 2.92 ($0.04) per kilowatt-hour (kWh). This project alone accounts for over 40% of its pipeline by capacity.

It’s looking likely that the state-owned Solar Energy Corporation of India (SECI), which awarded what is the world’s biggest solar project, will not be able to find takers at that price.

AUTHOR

Seetharaman G

Starting out as a business journalist in 2008, Seetharaman has written about energy, climate change, retail, banking, and technology. He has worked with Business Today, a fortnightly, and the Sunday edition of The Economic Times.

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