Adani Green Energy shares have witnessed a significant rally, surging 8% to Rs 1,115.00 and accumulating a 13% gain over two sessions. This upward momentum follows the Securities and Exchange Board of India's (SEBI) clearance of Gautam Adani, Rajesh Adani, and several Adani Group companies from allegations made by Hindenburg Research in January 2023.

SEBI Clearance Boosts Investor Confidence

The market regulator found no evidence of wrongdoing related to the allegations made earlier this year, providing a much-needed boost to investor confidence in the Adani Group stocks.

Jefferies Raises Target Price

Following these developments, global brokerage firm Jefferies has raised its target price for Adani Green Energy to Rs 1,300.00, forecasting a 27% upside potential from current levels. The brokerage notes that the stock is currently trading at a 63% discount to its January 2023 peak on a forward EV/EBITDA basis, suggesting potential for further growth.

Capacity Expansion and Utilization Improvement

Jefferies projects significant capacity additions for Adani Green Energy:

• 4.5 GW in FY26
• 6.3 GW in FY27

The brokerage also expects utilization to improve above 30% from 24.8% in FY25, indicating enhanced operational efficiency.

Strengthened Balance Sheet

A promoter infusion of Rs 9,350.00 crore through warrants has bolstered the company's balance sheet. This capital injection is expected to contribute to an improvement in the company's financial health, with net debt to equity projected to ease from 6.9x to 5.4x by FY30.

Robust Power Purchase Agreements

Over 80% of Adani Green Energy's installed capacity is secured under 25-year power purchase agreements, providing long-term revenue visibility and stability for the company.

Strong Financial Performance

Adani Green Energy has reported impressive financial results:

The company's capacity has more than doubled since January 2023, growing by 120% to reach 16.1 GW. Additionally, EBITDA has shown robust growth, with a compound annual growth rate (CAGR) of 36% from FY22 to FY25.

As Adani Green Energy continues to expand its capacity and improve its financial metrics, the recent SEBI clearance and positive analyst outlook may provide further momentum to the stock's performance in the coming sessions.

Adani Green Energy Limited (AGEL), a leading player in India's renewable energy sector, has taken a significant step towards expanding its clean energy portfolio. The company's wholly-owned subsidiary, Adani Renewable Energy Holding Eleven Limited (AREH11L), has incorporated two new wholly-owned subsidiaries focused on renewable energy generation.

New Subsidiaries

The two newly incorporated entities are:

1. Adani Ecogen One Limited (AE1L)
2. Adani Ecogen Two Limited (AE2L)

Both companies were registered on September 19, with the Registrar of Companies, Gujarat at Ahmedabad. Each subsidiary has been established with an authorized and paid-up capital of Rs. 1,00,000.

Business Objectives

The primary objective of both AE1L and AE2L aligns closely with AGEL's core business focus. They are set to:

• Generate, develop, and distribute electrical energy
• Utilize renewable sources such as wind and solar energy
• Transform, transmit, and supply power generated from these clean energy sources

Current Status

As of now, neither AE1L nor AE2L has commenced business operations. This strategic move by Adani Green Energy Limited appears to be a preparatory step for future expansion in the renewable energy sector.

Industry Impact

This development underscores AGEL's commitment to strengthening its position in the renewable energy power generation industry. By creating these new subsidiaries, the company is laying the groundwork for potential growth and increased capacity in clean energy production.

Corporate Structure

The incorporation of these subsidiaries creates a multi-tiered structure within the Adani Green Energy group:

• Adani Green Energy Limited (Parent Company)
  • Adani Renewable Energy Holding Eleven Limited (Wholly-owned subsidiary)
    • Adani Ecogen One Limited (Wholly-owned subsidiary of AREH11L)
    • Adani Ecogen Two Limited (Wholly-owned subsidiary of AREH11L)

This structure allows for focused management and potentially streamlined operations in different aspects of renewable energy generation.

Regulatory Compliance

AGEL has duly informed the stock exchanges about this development, in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As the renewable energy sector continues to gain prominence in India's power landscape, Adani Green Energy's latest move signals its intent to capitalize on the growing opportunities in clean energy generation and distribution.