NEW DELHI: The
renewable energy
unit of billionaire
Gautam Adani
‘s empire is at risk of missing key growth targets unless it resorts to a share issue to consolidate its finances, according to a report by London-based
Snowcap Research
.
Adani Green Energy
is falling short of its stated return targets, Snowcap said in a 51-page report on Thursday. The lower returns, coupled with rising debt-financing costs, mean the firm may not have sufficient funding to meet its 2030 renewable energy goal.
The company “can meet just 50% of its 50GW target funding requirement by 2030 without raising equity, despite claiming this target is ‘fully funded’,” Snowcap said.
It added that Adani Green isn’t meeting a target announced in 2021 of returning 17% on capital through 2025. Based on Snowcap’s analysis, Adani Green more likely delivered an 11-12% return on capital on projects completed over the past three years – in line with the company’s peers – at a 9.5% cost of debt.
A representative for Adani Green said the company “categorically rejects” the analysis published by Snowcap. “The report is baseless, factually inaccurate, and contains analytical errors and false allegations, all intended to negatively impact” the company’s share price, the representative said, adding that the management stands by its public disclosures.
Adani Green’s shares fell over 2.2% after the report was published but erased some of those losses soon after. The flagship for the group, Adani Enterprises, slipped as much as 2.6% on Thursday. Snowcap’s criticism comes more than a year after the
Adani Group
was jolted by allegations brought by short-seller Hindenburg Research. The US-based firm’s accusations of corruption and market manipulation initially wiped more than $150 billion off the Adani Group’s market value. Adani has repeatedly denied wrongdoing and those stock losses have largely been recouped.
Snowcap says it holds no positions in or against Adani Green, which is roughly 56% owned by units controlled by Adani.
