Adani Power is embarking on an ambitious expansion, aiming to boost its installed power generation capacity to 45 GW by 2032. This new target represents an increase from its earlier goal of 42 GW. The company revealed these plans during its latest earnings conference call, alongside details of a substantial capital expenditure program.
Significant Capital Investment and Funding Strategy
To support this aggressive growth, Adani Power has allocated over ₹2 lakh crore for capital expenditure in the coming years. The management reassured investors that this massive investment program is largely expected to be financed through internal accruals, minimizing the need for significant external fundraising.
Projected annual capital expenditure includes:
- FY27: Approximately ₹23,000 crore
- FY28: More than ₹30,000 crore
- FY29: Between ₹33,000 and ₹35,000 crore
The company also indicated it is evaluating an additional 3 GW of thermal capacity, though this remains in the planning phase. Potential expansion could also come from increasing its stake in Jaiprakash Power Ventures (JPVL), where it currently holds an effective 24% interest.
Project Pipeline Progress and Long-Term PPAs
Several key projects are advancing as per schedule. The Korba Phase II project (1,320 MW) is slated for commissioning by December 2026. Mahan Phase II (1,600 MW) is targeting its first unit in the first quarter of FY28. Construction is ongoing at Raipur Phase II and Raigarh Phase II, while work has commenced on the greenfield Mirzapur project (1,600 MW).
Adani Power emphasized that 95% of its installed capacity is now secured by long-term power purchase agreements (PPAs). This strategic move significantly reduces its exposure to the volatile merchant power market and enhances earnings visibility. In the first quarter, PPA sales volumes surged by 30% to 25 billion units, partly due to converting capacity at Butibori and Tuticorin into long-term contracts. Conversely, merchant sales declined to 4.3 billion units from 5.8 billion units.
Financial Health and Nuclear Ambitions
The company reported a comfortable balance sheet with total debt at ₹58,381 crore and net debt at ₹47,643 crore. Management stated that the net debt-to-EBITDA ratio is around two times and intends to maintain leverage within the 2–3 times range despite the extensive expansion program. While a Qualified Institutional Placement (QIP) approval was sought, management clarified it is only an enabling resolution, with no immediate decisions on size, timing, or use of proceeds. Equity fundraising will only be considered if funding requirements arise and market conditions are favorable.
Collections from the Bangladesh Power Development Board (BPDB) continue to improve, with outstanding receivables around $400 million in Q1 and monthly collections of approximately $100 million expected to reduce dues further.
Adani Power has also doubled its nuclear generation target to 10 GW by 2035. However, the execution of these nuclear projects is contingent on amendments to the Atomic Energy Act. The company is exploring partnerships with both domestic and international technology providers, estimating that projects could take around five years from regulatory approval to become operational.