French energy giant Total SA will invest $510 million (about Rs 3,628 crore) in an equal joint venture with Adani Green Energy Ltd that will hold solar energy assets, the two companies said on Thursday.
The joint venture of Adani Green and Total Gas & Power Business Services SAS will house 2,148 MWac of operating solar projects, the Indian company said in a statement.
These projects are spread across 11 states and currently wholly owned by Adani Green.
The deal comes barely months after Total agreed to buy a 37.4% stake in Adani Gas Ltd for as much as Rs 6,154.75 crore ($868.5 million).
Interestingly, some days back Adani group chairman Gautam Adani had said that his diversified conglomerate will become India’s largest renewable energy player within the year. He added that the Adani group would be the largest solar power producer in the world by 2025 and the biggest renewable energy firm globally by 2030.
Total’s investment, one of the biggest to-date, in India’s renewable energy sector comes at a time when the country struggles to meet its ambitious target to set up 100GW solar capacity, of which 40GW will be in the solar rooftop space.
The country had witnessed breakneck growth in the solar industry during the first 3-4 years following the Narendra Modi government announcing its ambitious target. However, growth seems to have slackened.
Moreover, not only have several states including Andhra Pradesh threatened to renege or renegotiate long term power purchase agreements, many government-owned power distribution companies are struggling to clear dues of renewable power producers.
Adani Green seems to be unfazed by this reversal of fortunes in the Indian renewable energy sector, as it looks to increase its operational capacity by 2021 to 5.3 gigawatt from 2.5 GW at present. And in January, the company said it had won a bid for a 700-megawatt wind-solar hybrid project that would take its total capacity to 6 GW by 2022-23.
In fact, as VCCircle noted last month, Adani Green has seen an exponential rise in its valuation since it listed on the stock exchanges. In the five months since the beginning of September last year, shares of Adani Green moved from Rs 45-46 levels to a record high Rs 243.25, in January this year.
Although the stock is now trading around Rs 202 apiece, the green energy company is today more than six times as valuable as it was when it began trading on the exchanges in mid-2018 after it was demerged from Adani Enterprises Ltd as part of the group’s efforts to simplify its business structure.
With a market capitalisation of nearly Rs 30,000 crore, Adani Green has stormed into the club of India’s top 100 listed companies, leaving several stock market analysts bemused with such steep valuations.