Adani Green Faces Financial Challenges Amid Growth Targets
ECONOMY & POLICY

Adani Green Faces Financial Challenges Amid Growth Targets

The renewable energy unit of billionaire Gautam Adani's empire, Adani Green Energy, may miss key growth targets unless it consolidates its finances through a share issue, according to a report by London-based Snowcap Research.

In a detailed 51-page report, Snowcap Research highlighted that Adani Green Energy is falling short of its stated return targets. The report emphasized that the combination of lower returns and rising debt-financing costs threatens the company's ability to meet its ambitious 2030 renewable energy goal. Snowcap's analysis indicated that without raising equity, Adani Green can only meet 50 percent of its 50GW target funding requirement by 2030, despite the company's claims that the target is "fully funded."

Snowcap also pointed out that Adani Green has not achieved the return on capital target of 17 percent announced in 2021. Instead, the company has likely delivered an 11-12 percent return on capital for projects completed over the past three years, aligning with industry peers but below expectations, with a 9.5 percent cost of debt.

Adani Green's response to the report was swift and categorical. A company representative stated that the analysis was "baseless, factually inaccurate, and contains analytical errors and false allegations," designed to negatively impact the company's share price. Despite the report, Adani Green's shares fell over 2.2 percent but recovered some losses shortly after. Adani Enterprises, the group's flagship company, also saw a dip of up to 2.6 percent.

The criticism from Snowcap comes over a year after the Adani Group faced significant allegations from short-seller Hindenburg Research, which accused the group of corruption and market manipulation. These accusations initially wiped out over $150 billion of the Adani Group's market value, though Adani has consistently denied any wrongdoing and much of the stock value has since been regained.

Snowcap clarified that it holds no positions in or against Adani Green, which is approximately 56 percent owned by units controlled by Adani.

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The renewable energy unit of billionaire Gautam Adani's empire, Adani Green Energy, may miss key growth targets unless it consolidates its finances through a share issue, according to a report by London-based Snowcap Research. In a detailed 51-page report, Snowcap Research highlighted that Adani Green Energy is falling short of its stated return targets. The report emphasized that the combination of lower returns and rising debt-financing costs threatens the company's ability to meet its ambitious 2030 renewable energy goal. Snowcap's analysis indicated that without raising equity, Adani Green can only meet 50 percent of its 50GW target funding requirement by 2030, despite the company's claims that the target is fully funded. Snowcap also pointed out that Adani Green has not achieved the return on capital target of 17 percent announced in 2021. Instead, the company has likely delivered an 11-12 percent return on capital for projects completed over the past three years, aligning with industry peers but below expectations, with a 9.5 percent cost of debt. Adani Green's response to the report was swift and categorical. A company representative stated that the analysis was baseless, factually inaccurate, and contains analytical errors and false allegations, designed to negatively impact the company's share price. Despite the report, Adani Green's shares fell over 2.2 percent but recovered some losses shortly after. Adani Enterprises, the group's flagship company, also saw a dip of up to 2.6 percent. The criticism from Snowcap comes over a year after the Adani Group faced significant allegations from short-seller Hindenburg Research, which accused the group of corruption and market manipulation. These accusations initially wiped out over $150 billion of the Adani Group's market value, though Adani has consistently denied any wrongdoing and much of the stock value has since been regained. Snowcap clarified that it holds no positions in or against Adani Green, which is approximately 56 percent owned by units controlled by Adani.

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