History of Adani Power

8/8/2019 History of Adani Power

1/25

` The Adani Group is a Gujrat ba s ed Ind ian conglomerate w ith the indus tr ialis t Gautam Adan i as its CMD and promoter. [2] The core bu si ness of the group is Commod ities Trad ing, ed i ble o il Manufactur ing, Mundra portoperat ions and d is tr i but ion of Natural Gas

` Type : Public

` Industry : Trading , Power , Oil and Gas , Infrastructure , ports & SEZ , Logistics , FMCGs , Mining, Agro business , Education , Call Center

` Founded : 1988

` Headquarters : Adani House, Ahmedabad Key people

` Founder: Gautam Adani , , Chairman

` Revenue : US$ 6 billion (2010)

` Employees : more than 10000 (2009)

` Website : www.adanipower.com


2/25

The Company wa s i ncorporated a s Adan i P ower L imi ted on Augu s t22, 1996 and rece iv ed a cert if icate of commencement of bu si ness onSeptember 4, 1996.

The Company became a pr iv

ate lim

ited company on June 3, 2002 andthe name of the Company wa s s ubs equently changed to Adan i P ower

P r iv ate L imi ted.

The RoC iss ued a fre sh cert if icate of incorporat ion on June 3, 2002.


3/25

The Company wa s , thereafter, con v erted into a publ ic limitedcompany on Apr il 12, 2007 and the name of the Company wa schanged to Adan i P ower L imited.

Further, upon cea si ng to be a pr iv ate l imited company, the word pr iv ate wa s deleted through a s pec ial re solut ion at the EGM of theCompany held on March 28, 2007.

The fre sh cert if icate of incorporat ion con s equent to change of our name wa s granted by the RoC to our Company on Apr il 12, 2007.


4/25

The Company wa s or iginally incorporated by Mr. Gautam S. Adan i and Mr.Raje s hS. Adan i, together w ith the ir relat iv es .

In 2004, pur s uant to internal re s tructur ing among s t the P romoter s , the ent ires harehold ing of the Company wa s tran s ferred to Mundra P ort and Spec ialEconom ic Zone L imited (M P SEZL).

Sub s equently, on May 29, 2006, M P SEZL tran s ferred its ent ire s harehold ing inthe Company to Adan i Enterpr is es Limited.


5/25

` Augu s t 22, 1996 Incorporat ion of the Company` September 20, 2006 Execut ion of Loan agreement (f inanc ial clo s ure) w ith

Lender s of Mundra P has e I P ower P roject` December 8, 2006 Coal s upply agreement w ith AEL for Mundra P has e I

P ower P roject, wh ich wa s extended to Mundra P has e II P ower P rojectthrough amendment agreement dated` February 2, 2007 Execut ion of PP A w ith GUVNL for 1,000 MW` February 6, 2007 Execut ion of PP A w ith GUVNL for 1,000 MW` June 27, 2007 Execut ion of s ubord inate loan agreement for Mundra P has e

I and IIP

ower P

roject` July 25, 2007 Execut ion of Loan agreement (f inanc ial clo s ure) w ith

Lender s of Mundra P has e II P ower P roject


6/25

September 28, 2007 Execut ion of In v es tment Agreement w ith 3 i P ower In v es tment A1 L imited

Nov ember 6, 2007 Allocat ion of Lohara We s t and LoharaExten si on (E) Coal m ining block s for T iroda P ower P roject

January 15, 2008 Execut ion of Shareholder Agreement w ith

Millenn ium De v eloper s P r iv ate L imited for inv es tment in TirodaP roject

February 1, 2008 Agreement to Lea s e for 204.28 ha si gned w ithMahara s htra Indu s tr ial De v elopment Corporat ion for T iroda P rojectMarch 24, 2008 PP A w ith AEL for 221 MW

March 24, 2008 Coal s upply agreement w ith AEL for MundraP has e III P ower P roject


7/25

March 27, 2008 Execut ion of loan agreement (f inanc ial clo s ure) for Mundra P has e III P ower P roject

March 27, 2008 Execut ion of s ubord inate loan agreement for MundraP has e III P ower P roject

March 28, 2008 Execut ion

Apr il 15, 2008 Coal s upply agreement w ith AEL for Mundra P has e IVP ower P roject, wh ich wa s amended

Apr il 13, 2009 Augu s t 7, 2008 PP A w ith UHBVNL for 712 MW

Augu s t 7, 2008 PP A w ith DHBVNL for 712 MW

September 8, 2008 PP A w ith MSEDCL for 1,320 MW e ign currencyloan agreement for Mundra P has e III P ower P roject


8/25

Nov ember 24, 2008 In v es tment Agreement w ith Ventura P ower

January 8, 2009 Co-de v eloper agreement w ith M P SEZL

January 30, 2009 Execut ion of loan agreement (f inanc ial clo s ure)for T iroda P ower P roject - P has e I

March 25, 2009 Bo iler l ight-up of un it I of Mundra P ower P roject -P has e I

March 27, 2009 Share subscription agreement with SomersetFund

May 23, 2009 Synchronization of unit I on Mundra Phase IPower Project

June 24, 2009 Execution of loan agreement (financial closure)for Mundra Phase IV Power Project


9/25

2010

Adani Power Ltd has appointed Mr. R. K. Madan as an

Additional Director in the category of Non Executive-Non IndependentDirector w.e.f. March 20, 2010 by the Board of Directors of theCompany.


10/25


11/25

Adan i P ower L imited ha s recently po s ted its draft pro s pectu sfor f iling an I PO . Here is an ov er vi ew of Adani Power Limited

IPOBusiness of Adani Power Limited

Adan i P ower L imited w ill be in the bu si ness of de v elop ing,operat ing and ma inta ining power project s i n Ind ia.

It is part of the Adan i Enterpr is e Limited, wh ich is a largeInd ian conglomerate w ith rev enue s of ov er R s .196,097.10million in f is cal 2008.

The parent company is one of the three largest coal traders in

India and the largest power trading company in India (in thelas t three year s ).


12/25

The group its elf is look ing at v ertical integrat ion w ith power

project s and it currently ha s pres ence in:

Coal M iningCoal Trad ingSh i pp ingP ower Generat ionP ower Tran s missi onP ower Trad ingO wn ing and O perat ing a SEZ


13/25

Adan i P ower L imited ha s four thermal power plants that are inv ar ious s tage s of de v elopment:

1. Mundra P has e 1 & 2 w ith a capac ity of 1,320 MW. Both pha s es are s plit into s ub generat ion of 330 MW each. The f ir s t pha s e of 330 MW each are expected to get comm issi oned by June 2009and the full project is expected to get comm issi oned by Feb 2010.

2. Mundra P has e 3 w ith a capac ity of 1,320 MW, out of wh ich 660MW w ill be comm issi oned in Jan 2011 and the rema ining by June2011.

3. Mundra P has e 4 project w ith a capac ity of 1,980 MW, out of wh ich 660 MW w ill be comm issi oned by Aug 2011 and the

rema ining by Apr il 2012.


14/25

4. Tiroda P ower P roject w ith a capac ity of 1,980 MW, out of

wh ich 660 MW w ill be comm issi oned by July 2011 and therema ining by Apr il 2012.

All date s are current e s timate s .The company ha s appl ied for s ector s pec if ic SEZ appro v als for

all its coal project s . If granted, th is will g iv e them s ubs tant ial taxadv antage s .

Since Adan i P ower is part of the Adan i group wh ich is a major coal producer and trader it w ill benef it in term s of obta iningraw mater ials in a t imely and s ecured fa s hion


15/25

Adan i P ower is located in the we s tern reg ion and ha s got a locat ionaladv antage; both in term s of s ourc ing a s well a s dis tr i but ion. The power

plant s are located in the rap idly indu s tr ializi ng area s of Mahara s htraand Gujarat and w ill benef it from the growth of the s e s tate s .

Ind ia face s acute power s hortage and w ith the deregulat ion in the power s ector there are plenty of opportun ities up for grab s for pr iv ate s ector player s . Accord ing to CERC the power s hortage at Dec2008 wa s 15,175 MW and s o the company ex is ts in a s ector wh ich is s et for growth and ha s inherent demand.


16/25

K ey Risks Facing Adani Power Limited

1. No Operating History: Adan i P ower ha s no current

operat ional power project s or any other re v enue generat ingact ivi ty that can pro vi de a ba sis for e v aluat ing its busi ness .2. Long Gestation Period: P ower project s hav e a long ge s tation

per iod and Adan i P ower w ill take a long t ime to get into the posi tiv e cas h flow generat ing terr itory.3. Significant Indebtedness: Adan i P ower ha s ass umedsi gnif icant debt s to the tune of R s .49,919.04 m illion and th is increa s es its v ulnerab ility to downward s econom ic cond itions .Since the company ha s s o much debt already it limits Adan iP owers ability to ra is e more ca s h in the future if requ ired.4. Potential Promoter Conflict of Interest: Adan i P ower w ill

rely heavi

ly onits

promoter s

to provi

deit f

inanc

ial know howand acce ss to key per s onnel. S ince, s ome promoter group

compan ies operate in the s ame bu si ness area s th is pos es potent ial confl ict of intere s t.


17/25

` Adan i P ower ha s been s hortl is ted to b id for a 1,238-megawatt (mw)thermal power project and coal-m ining r ights in Ko s ov o, an off icial s aid.

` Adan i P ower and its Indone si an arm P T Adan i Global are among four group s s elected by Ko s ov o go v ernment to b id to bu ild two coal-ba s ed un its of 560 mw and 678 mw and extract the fuel for u s e by the plant s , Adan i

P ower ch ief operat ing off icer Ra vi Sharma s aid.` The Gautam Adan i-led f irm plan s to s pend about R s 82,500 crore ($18

billion) to increa s e capac ity almo s t 17-fold to 16,500 mw in the next four year s , w ith a focu s on coal-f ired generator s . The ut ility, wh ich ra is ed R s 3,000 crore in a s hare s ale la s t Augu s t, currently produce s 990 mw atMundra in Gujarat s tate, the si te of a 4,620-mw plant.

` The w inning group w ill s ecure m ining r ights for about 330 m illion tonne of lignite from the S i bov c South area to s upply to both un its , Sharma s aid.Lign ite is a brown-colored, low-ranked coal w ith a h igh mo is ture contentus ed for power generat ion.


18/25


19/25

` Adan i power s pend r s .82500 crore to increa s e capac ity almo s t 17 fold to 16,500 MW in thenext four year s .

` The ch ief execut iv e off icer agree to that project.

` We bel iev e the power indu s try in Ind ia w ill s ee a b ig boom in the com ing year s , con si der ingthe energy s hortfall . They are creat ing and bu i lding infra s tructure to meet the ir owncapt iv e requ irement s , wh i le at the s ame t ime, they may make money al s o by lea si ng outth is infra s tructure

`

Adani is

expanding

its

coal min

ing operat

ion

sat a t

ime when Ind

ia

isfac

ing a

shortageof the fo ssi l fuel for power generat ion. The company ha s a 73.5% s take in Adan i P ower

Ltd., wh ich currently operate s power plant s wi th 990 megawatt s ins talled capac i ty.

` Mr. Chok s ey ha s a target of 680 rupee s on the s tock for the current f is cal year end ingMarch, 2011 and is expect ing a 25% return for the next f is cal year.

`

We remain po

sitiv

ein the long-run becau

se the company ha

sa clear focu

son

its goal s , he added, not ing the f irm ha s s pec if ied a target of ach ievi ng a generat ing

capac i ty of 20,000 megawatt s and of m ining 200 m i llion metr ic ton s of coal in another decade.


20/25

Adan i P ower Ltd (Adan i P ower), an anc illary of the Adan i Group,has comm issi oned and s ynchron is ed its f ir s t un it of 330 mw atMundra on May 24, 2009.

The power plant, the f ir s t by the lead ing pr iv ate group, ha s a capac ityof 4,620 mw, con sis ting four turb ines of 330 mw each and f iv eturb ines of 660 mw each.

The R s 19,106 crore project is expected to be fully comm issi oned by the end of 2011.

Adan i P ower is prepared to produce 330 mw out of 4,620 mw totalcapac ity in the Mundra power fac ility. The power s tation w ill reachcomplet ion by the end of 2012.

Adan i P ower ha s already entered into power purcha s e agreement s with the Gujarat adm inis trat ion.


21/25

In later pha s es , the plant w i ll s upply power to Raja s than, Haryana andMahara s htra.

For remo v al of power from Mundra power plant, Adan i P ower ha s es tabl is hed a 413 km, 400 kV ded icated tran s missi on l ine.

Siemen s AG ha s been awarded a contract to e s tabl is h th is tran s missi online. Ch ina ha s s uppl ied the equ i pment and technology for the project. Atleas t 10,000 worker s includ ing laborer s hav e been h ired at the project si te,wi th Ch ines e worker s repre s ent ing 10 per cent. Adan i P owers goal in thenext f iv e year s is to ach iev e 9000 mw power generat ion w i th a 100 per cent growth input s in each s tage.

AP L is pre s ently execut ing 400 KV D/C tran s missi on l ine of about 431KM d is tance from Mundra to Dehgam.

AP L is als o execut ing 500 KV B i-P ole HVDC tran s missi on l ine of about 800 KM d is tance from Mundra to Haryana for tran s mi tting 2500


22/25

The company had clo s ed the iss ue at a pr ice of R s 100.Analy s ts had expected Adan i P ower to open 6-10% h igher buts li p below the iss ue pr ice on project execut ion r is k.

The market will

settle the pr

ice

in

its

own way, we do not bel iev e that we pr iced the iss ue too aggre ssiv ely, s aidGautam Adan i , cha irman of the company.

When the I PO was announced, analy s ts had ra is ed concern s on the long ge s tation per iod of power compan ies and Adan isfledgl ing s tatu s in the bu si ness .

The fact that Adan i P ower doe s not ha v e a si gn if icant

operating h

istory to ju

stify

its

execution capab

ilitie

s is

a keyconcern about the company, s aid a report on the offer ing byAngel Brok ing, authored by G ir is h Solank i and V Sr iniv as an.


23/25

Adan i P ower ha s four thermal power plant s under execut ion, wh ichwould ha v e a comb ined capac ity of 6600 mw on complet ion. Th is capac ity is expected to be in place by 2012.

Nev erthele ss , the company ra is ed R s 3,016 crore for its project s inTiroda and Mundra.

The offer ing con s tituted 13.84% of the po s t-iss ue pa id up cap ital of thecompany.

CLSA, T Rowe P r ice, Sundaram BN P P ar i bas Mutual Fund and Cred itSu iss e were among the anchor inv es tor s to the iss ue, wh ich wa s ov er s ubs cr i bed four t imes ov er on the v ery f ir s t day its elf.

By the time b

idd

ing clo

sed on July 31, the offer

ing had beenov er s ubs cr i bed almo s t 22 t imes .


24/25

The company hope s to add 20,000 mw by 2020, through a m ixof hydro, s olar, w ind, thermal and ga s -ba s ed power, thecha irman s aid

No further fund ra isi ngs are on the an vi l. There are no plan s

to ra is e further cap i tal in the fore s eeable future, we w i ll bedepend ing on internal accrual s wi th match ing debt for anyfurther cap i tal need s , added Ameet De s ai , director, Adan iP ower.


25/25

History of Adani Power

Documents