Adani Energy Solutions bags 7 GW Khavda transmission project; here’s how stock reacts

Adani Energy Solutions Ltd (AESL), formerly known as Adani Transmission Ltd, informed exchanges that it has secured a 7 gigawatt (GW) renewable energy evacuation transmission project in Khavda, located in Kutch district of Gujarat. The announcement came two days after the electric power transmission arm of Adani Group signed a share purchase agreement with REC Power Development and Consultancy for acquiring 100% equity in Khavda IVA Power Transmission Ltd.

Cheering the news, shares of Adani Energy Solutions gained as much as 1.5% to ₹1,023 on the BSE. Early today, the stock opened higher for the second straight session at ₹1,012.25, marginally up from Friday’s closing price of ₹1,007.85.

At the time of reporting, Adani Energy Solutions shares were trading at ₹1,010.50, up 0.26%, with a market capitalisation of ₹1.21 lakh crore. The Adani group stock touched its 52-week high of 1,347.90 on August 1, 2024, while it slipped to its 52-week low of ₹686.90 on October 26, 2023.

The historical data shows that AESL shares have delivered 23.5% return to its shareholders in the last one year, while it corrected over 4% in the calendar year 2024. The energy stock has lost 5% in six months and nearly 20% in a month.

In an exchange filing this morning, AESL says it has completed a special purpose vehicle (SPV) acquisition of Khavda PhaseIV Part-A transmission project after receiving a letter of intent from REC Power Development and Consultancy Ltd (RECPDCL). A SPV is a subsidiary created by a company to operate it as a separate legal entity with its own assets and liabilities.

“The award of this project further strengthens AESL’s position as a leader in India's energy transition and consolidates its position as the largest private sector transmission player in India,” the company says in a BSE filing.

As per the filing, Khavda IVA Power Transmission Ltd, set up by RECPDCL for evacuating 7 GW of Renewable Energy (RE) from Khavda RE park, under phase IV part A package, has been acquired by AESL to execute the project. The Khavda IVA transmission line, part of National Grid, will help evacuate 7 GW of RE by connecting 765 kilovolt (kV) double circuit lines from Khavda to Lakadia and Khavda to Bhuj (both in Gujarat) and setting up transformation capacity of 4,500 megavolt-amperes (MVA).

AESL won the project through the tariff-based competitive bidding (TBCB) process and will commission the project in the next 24 months on BOOT (Build, Own Operate, and Transfer) basis and maintain it for the next 35 years.

The Adani group company proposes to invest ₹4,091 crore to build the around 298 km (596 ckm) transmission project. The project also includes setting up of 300 MVAr STATCOM and 3x1500 MVA, 765/400 kV Inter-connecting Transformer (ICTs) with 1x330 MVAr, 765 kV and 1x125 MVAr, 420 kV bus reactors.

“As the world’s largest renewable energy park, Khavda demands power evacuation infrastructure that is not only world-class but also resilient and future-ready,” says Kandarp Patel, Chief Executive Officer, AESL.

“This investment will not only establish the critical transmission network required to evacuate the planned 30 GW of green power that Khavda will generate but also provide the much-needed grid stability,” he adds.

Khavda is the world’s largest renewable energy park with a planned generation capacity of 30 GW. “The award of this project to AESL boosts the availability of critical transmission infrastructure required for evacuation of clean energy. The Adani Group’s focused approach will also ensure the transformation of Khavda from a barren stretch of land into a landmark in India’s net zero journey,” the release notes.

As of August 30, 2024, AESL is the country’s largest private transmission company with a cumulative transmission network of 21,783 circuit kilometers (ckm) and 61,686 MVA transformation capacity. In its retail electricity distribution business, the company serves approximately 13 million consumers in Mumbai and the industrial hub of Mundra SEZ. It is ramping up its smart metering business, aiming to become India’s leading smart metering integrator. 

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