Event update: Adani Green Engergy (Unrated) - New win in SECI bid coulddouble the portfolio
Presented are key takeaways from Adani Green (AGL) analyst day, which we attended at their corporate office in Ahmedabad:
Key Highlights
- Among the largest renewable IPP with 5GW portfolio: AGL has a renewable portfolio of 5GW2.4GW is operational capacity, mainly solar and the remaining 3GW is under construction capacity, dominated by 1.7 GW of wind and 1GW of hybrid.
- A well-diversified portfolio: AGL’s portfolio is spread across 16 sites and 11 states. Besides, the company’s portfolio has 65% power purchase agreements (PPA) with NVVN and SECI. About 35% of the capacity is tied to Tamil Nadu, Karnataka and other state DISCOMs. AGL’s portfolio is well diversified between wind (1.7GW), solar (2.3GW) and hybrid (1GW), as per management.
- Current portfolio does not require any further equity: AGL expects to meet the equity requirement of its under construction portfolio by increasing the debt (with longer tenor) of its operational projects. Company is exploring international bond markets for debt tie-ups.
- Recurring EBITDA at ~Rs50bn: AGL expects EBITDA to increase to Rs49bn post commissioning of its under-construction projects. While the company expects its operational portfolio to generate Rs24bn, under construction projects it believes will bring in Rs25bn.
- Receivables at Rs4.8bn: AGL has 180 days of receivables at Rs4.8bn, mainly due to delays in payment from TANGEDCO.
- AGL participates in 7GW SECI-linked bid: AGL participated in 2GW solar manufacturing and 7GW solar PPA bids, for which the ceiling price is Rs2.93/Kwh.The bid also has green shoe option to double the capacity to be set up. Under the bid, the winner is free to source solar module from anywhere, while it would be required to invest atleast26% in the SPV operating the new solar manufacturing capacity..
Unrated
AGL is one of the largest renewable IPP having 5.3GW of well-diversified portfolio. Declining competitive intensity in bids has led to AGL turning selective on competitive bidding. The stock currently trades at an EV/EBITDA of 18xFY19. We do not have any coverage on the stock.
Adani Green Energy Limited is an India-based power generation company. The Company builds and operates solar and wind energy power plants in India. It operates a fully-operational single-location solar power plant with a capacity of 648 Megawatts (MW) and other plants in various parts on India. Its commissioned power plants are located in Tamil Nadu, Punjab, Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Chattisgarh, Telangana, and Karnataka. The Company is also constructing wind and solar energy power plants in Australia and the United States.
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