INDIA: In a generally down market on Monday, Adani Power shares reached a record high of Rs 428.20, up 4% on the BSE, after the firm announced that it had decided to purchase DB Power’s thermal power assets for an estimated Rs 7,017 crore.
When opposed to the S&P BSE Sensex’s 0.7% fall at 09:32 a.m IST, Adani Power traded 3% higher at Rs 423.50.
In Chhattisgarh’s District Janjgir Champa, DB Power owns and runs a 2×600 MW thermal power plant with annual revenue of Rs 3,488 crore (FY22).
With fuel supply agreements with Coal India and long- and medium-term power purchase agreements covering 923.5 MW of its capacity, DB Power has been successfully running its facilities.
“Its activities and product offerings in the state of Chhattisgarh’s thermal power sector will grow as a result of the acquisition. The proposed acquisition is subject to the Competition Commission of India’s permission and any additional approvals that may be required as a result of the due diligence investigation to be done about DPPL and DB Power,” the business stated.
Adani Power rises around 47% in a month
Adani Power, meanwhile, has outpaced the market over the past month, rising 47% compared to the S&P BSE Sensex’s 6% increase.
The stock has soared 255% over the last six months compared to the benchmark index’s gain of 3%.
EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization, increased by 227 percent year over year to Rs 7,506 crore.
The impact of higher fuel costs increased operating expenses brought on by the acquisition of Mahan Energen, unfavorable foreign exchange movement, and change in sales mix were partially offset by the growth, which was aided by prior period income recognition, improved tariff realization, and change in sales mix.
“The Indian government has enhanced the country’s electricity sector through a number of changes. These include fuel links provided under the Ujwal DISCOMS Assurance Yojana (UDAY) to spur the transformation of electricity distribution firms and the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI), among others, in its annual report for FY22,” Adani Power stated.
“The Pradhan Mantri Har Ghar Sahaj Bijli Yojana (Saubhagya) initiative and the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) for rural electrification have been combined to improve electricity accessibility to the last person through a more comprehensive network and policies intended to increase the viability of distribution companies,” the company said.
Adani Power added that the availability of a cost-effective and dependable power supply is a critical factor in overall growth. It is crucial for boosting the human development index and driving industrial development.
Due to the government’s emphasis on “Make in India,” rising disposable incomes and standards of living, as well as expanding industry, power demand in India is predicted to grow sustainably.
According to the Central Electricity Authority (CEA), India’s peak electricity consumption will be around 340 GW by 2030, up from a peak demand of 203 GW in 2021, business claimed.
In the past seven weeks, the stock has posted back-to-back gains and trading with a favorable bias. During that time, the share price has increased by almost 57%.
On the daily, weekly, and monthly charts, the stock is currently trading above the higher end of the Bollinger Band.
As long as the stock maintains above Rs. 415, or the higher end of the Bolligner Band on the daily chart, below which the next significant support would be around Rs. 400, the near-term bias will probably continue to be quite optimistic.
Select momentum oscillators on both the daily and weekly charts are in the overbought zone due to the sharp advance, so traders should exercise care at higher levels.
The stock is currently testing resistance on the upside near Rs 430, over which it can surge to Rs 458.