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ADANI POWER LTD.

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CONTENTS :
PAGE NUMBER
1.INDIAN POWER SECTOR 3
2. GLOBAL POWER SECTOR 5
3.PEST ANALYSIS OF POWER SECTOR 6
4.COMPETITOR ANALYSIS 7
5.SWOT ANALYSIS OF POWER SECTOR 8
6.ADANI POWER LTD. 10
7.POWER GENERATION 11
8.FINANCIAL HIGHLIGHTS 12
9.SWOT ANALYSIS OF ADANI POWER 14
10.STRATEGIES USED BY ADANI POWER LTD. 15















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INDIAN POWER SECTOR :
HISTORY :
The power sector in India has undergone significant progress after Independence. When India
became independent in 1947, the country had a power generating capacity of 1,362
MW. Hydro power and coal based thermal power have been the main sources of generating
electricity. Generation and distribution of electrical power was carried out primarily by
private utility companies. Notable amongst them and still in existence is Calcutta Electric.
Power was available only in a few urban centers; rural areas and villages did not have
electricity.After 1947, all new power generation, transmission and distribution in the rural
sector and the urban centers (which was not served by private utilities) came under the
purview of State and Central government agencies. State Electricity Boards (SEBs) were
formed in all the states. Nuclear power development is at slower pace, which was introduced,
in late sixties. In spite of the overall development that has taken place, the power supply
industry has been under constant pressure to bridge the gap between supply and demand.
Growth Scenario of Indian Power Sector :
Development of Power Sector is the key to the economic development. The power Sector has
been receiving adequate priority ever since the process of planned development began in
1950. The Power Sector has been getting 18-20% of the total Public Sector outlay in initial
plan periods. Remarkable growth and progress have led to extensive use of electricity in all
the sectors of economy in the successive five years plans. Similarly, the electricity generation
increased from about 5.1 billion units to 420 Billion units 82 fold increase. The per capita
consumption of electricity in the country also increased from 15 kWh in 1950 to about 338
kWh in 1997-98, which is about 23 times. In the field of Rural Electrification and pump set
energisation, country has made a tremendous progress. About 85% of the villages have been
electrified except far-flung areas in North Eastern states, where it is difficult to extend the
grid supply.
Structural Development of Power Sector
Till December 1950 about 37% of the installed capacity in the Utilities was in the public
sector and about 63% was in the private sector. The Industrial Policy Resolution of 1956
envisaged the generation, transmission and distribution of power almost exclusively in the
public sector. As a result of this Resolution and facilitated by the Electricity (Supply) Act,
1948, the electricity industry developed rapidly in the State Sector.
In the Constitution of India Electricity is a subject that falls within the concurrent
jurisdiction of the Centre and the States. The Electricity (Supply) Act, 1948, provides an
elaborate institutional frame work and financing norms of the performance of the electricity
industry in the country. The Act envisaged creation of State Electricity Boards (SEBs) for
planning and implementing the power development programmes in their respective States.
The Act also provided for creation of central generation companies for setting up and
operating generating facilities in the Central Sector. The Central Electricity Authority
constituted under the Act is responsible for power planning at the national level. In addition
the Electricity (Supply) Act also allowed from the beginning the private licensees to
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distribute and/or generate electricity in the specified areas designated by the concerned State
Government/SEB.
Regional Power Systems Emergence
In order to optimally utilise the dispersed sources for power generation it was decided right at
the beginning of the 1960s that the country would be divided into 5 regions and the planning
process would aim at achieving regional self sufficiency. The planning was so far based on a
Region as a unit for planning and accordingly the power systems have been developed and
operated on regional basis. Today, strong integrated grids exist in all the five regions of the
country and the energy resources developed are widely utilised within the regional grids.
Presently, the Eastern & North-Eastern Regions are operating in parallel. With the proposed
inter-regional links being developed it is envisaged that it would be possible for power to
flow any where in the country with the concept of National Grid becoming a reality during
12th Plan Period.
Current problem of power sector
Government giveaways such as free electricity for farmers, partly to curry political favor,
have depleted the cash reserves of state-run electricity-distribution system. This has
financially crippled the distribution network, and its ability to pay for power to meet the
demand. This situation has been worsened by government departments of India that do not
pay their bills.
Shortages of fuel: despite abundant reserves of coal, India is facing a severe shortage of
coal. The country isn't producing enough to feed its power plants. Some plants do not have
reserve coal supplies to last a day of operations. India's monopoly coal producer, state-
controlled Coal India, is constrained by primitive mining techniques and is rife with theft and
corruption; Coal India has consistently missed production targets and growth targets. Poor
coal transport infrastructure has worsened these problems. To expand its coal production
capacity, Coal India needs to mine new deposits. However, most of India's coal lies under
protected forests or designated tribal lands. Any mining activity or land acquisition for
infrastructure in these coal-rich areas of India, has been rife with political demonstrations,
social activism and public interest litigations.
Poor pipeline connectivity and infrastructure to harness India's abundant coal bed methane
and shale gas potential.
The giant new offshore natural gas field has delivered less fuel than projected. India faces a
shortage of natural gas.
Hydroelectric power projects in India's mountainous north and northeast regions have been
slowed down by ecological, environmental and rehabilitation controversies, coupled with
public interest litigations.
India's nuclear power generation potential has been stymied by political activism since the
Fukushima disaster in Japan.
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Average transmission, distribution and consumer-level losses exceeding 30%.
Over 300 million people in India have no access to electricity. Of those who do, almost all
find electricity supply intermittent and unreliable.
Lack of clean and reliable energy sources such as electricity is, in part, causing about 800
million people in India to continue using traditional biomass energy sources namely fuel
wood, agricultural waste and livestock dung for cooking and other domestic needs.
Traditional fuel combustion is the primary source of indoor air pollution in India, causes
between 300,000 to 400,000 deaths per year and other chronic health issues.
Global power sector :
Energy consumption is reportedly higher in countries where less than 5% of population lives
below poverty line. world power generation rose at an average annual rate of 3.7% from 1971
to 2004. This increase was largely due to development of electricity generation in several
developed countries and rural electrification in developing countries.
Deregulation in areas of global energy markets has led to fierce competition.now more than
ever electricity has to be produced at a lower cost with many countries imposing tightening
environmental legislation to reduce the impact of power generation on environment.
Collectively, developing countries use 30% of worlds energy but with projected population
and economic growth energy demands are expected to rise 95%.china and india will be the
key contributors to world energy consumption in future. Over the past decades their energy
consumption as a share of total world energy use has increased significantly. In 1980, china
and india together accounted for less than 8% of worlds total energy consumption. In 2005
their share had grown to 18%.

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The per capita consumPtion of different countries and regions of world varies and it is shown
in the following graph

Figure 1: comparative per capita consumption of electricity (Kwh)

PEST Analysis :
POLITICAL
1. Government is encouraging private players to produce power and also carry out its
transmission and distribution activities. There has been significant Increase in private
participation.
2. Indistinctness involved in complicated tariff rates has been done away with by the
government.
3. Regulatory authorities like Central Electricity Regulatory Commission (CERC) & State
Electricity Regulatory Commission (SERC) are appointed, to regulate the power industry at
centre and state level
4. The Indian government has set large scale goals in the 11th plan for power sector due to
which the power sector is poised for significant expansion.
5. Unbundling of the State Electricity Boards into separate Generation, Transmission and
Distribution units and privatization of power distribution has been initiated either through the
direct privatization or the franchisee route. While there has been a slow and gradual
improvement in metering, billing and collection efficiency, the current loss levels still pose a
significant challenge for distribution companies.
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ECONOMICAL
1. In order to provide availability of over 1000 units of per capita electricity by year
2012, it has been estimated that need-based capacity addition of more than 100,000
MW would be required. This has resulted in massive invstment plans being proposed
in the sub-sectors of Generation Transmission and Distribution
2. The Ministry of Power plans to establish an integrated National Power Grid in the
country by 2012 with close to 200,000 MW generation capacities and 37,700 MW of
inter-regional power transfer capacity. Considering that the current inter-regional
power transfer capacity of 20,750 MW, this is indeed an ambitious objective for the
country.
3. For increasing the generation capacity over the next 8-10 years, the corresponding
investments in the transmission sector is also expected to expand.
COMPETITOR ANALYSIS :
TATA POWER :
Tata Power is Indias largest integrated power company with a significant international
presence. The Company has an installed generation capacity of 6099 MW in India and a
presence in all the segments of the power sector viz Generation (thermal, hydro, solar and
wind), Transmission, Distribution and Trading. It has successful publ ic-pr ivate par tner
ships in Generat ion, Transmission and Distribution in India namely Tata Power Delhi
Distribution Limited" with Delhi Vidyut Board for distribution in North Delhi, 'Powerlinks
Transmission Ltd.' with Power Grid Corporation of India Ltd. for evacuation of Power from
Tala hydro plant in Bhutan to Delhi and 'Maithon Power Ltd.' with Damodar Valley
Corporation for a 1050 MW Mega Power Project at Jharkhand. It is one of the largest
renewable energy players in India and is developing countrys first 4000 MW Ultra Mega
Power Project at Mundra (Gujarat) based on super-critical technology.

The pricing system of Tata Power is as follows.
















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Consumer Category Final FAC Charge for Billing
Units Rs/ kWh
LT Category
LT 1- Residential
BPL Category 0.09
> 51 (0-100 units) 0.23
> 52 (100-300 units) 0.54
> 53 (above 300 units) 0.95
> 54 (> 500 Units) 1.14

LT II - LT Commercial
> 0 - 20 kW (LT-II -a) 0.92
> 20kW and <= 50 kW (LT-II-b) 1.03
> 50 kW (LT -II -c) 1.09

LT III - LT Industries upto 20 kW Load 0.97
LT IV - LT Industries above 20 kW Load 1.10
LT V - Advt & Hoardings 2.92
L T VI - Street Light 0.86
LT VII - Temporary
- Temporary-Religious 0.43
- Temporary-Others 2.37
LT VIII - Crematorium and Burial Grounds 0.43

HT Category
HT I - Industry 1.08
HT II - Commercial 1.12
HT III - Group Housing Society 0.88
HT IV - Temporary Supply 1.94
HT V - Railways
> 22/33 kV 1.07
> 100kV 1.03

PARTNERSHIPS :
Partnerships:Its international presence includes strategic investments in Indonesia through
30% stake in coal mines and a geothermal project; in Singapore through Trust Energy
Resources to securitise coal supply and the shipping of coal for its thermal power generation
operations; in South Africa through a joint venture called Cennergi to develop projects in
South Africa, Botswana and Namibia; in Australia through investments in enhanced
geothermal and clean coal technologies and in Bhutan through a hydro project in partnership
with The Royal Government of Bhutan. With its track record of technology leadership,
project execution excellence, world class safety processes, customer care and driving green
initiatives, Tata Power is poised for a multi-fold growth and committed to 'lighting up lives'
for generations to come.


SWOT ANALYSIS OF POWER SECTOR :

STRENGTH :

1. Well established and vast transmission and distribution network.
2. Highly qualified engineering and technical personnel.
3. Regulatory framework is further facilitated with enactment of Electricity
Bill, 2003.
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4. The Electricity Bill, 2003 holds promises for the power sector and certainly for the
consumer by way of competition reliability and rationalized tariff structure.
5. Emergence of strong and globally comparable central utilities (NTPC,
POWER GRID).

WEAKNESS :

1. Lack of proper metering and theft has led to large scale losses. Only
51%of the power generated is billed and only 41% is realized
2. Moreover, Government provides power to agricultural sector at subsidized rates and
also free of cost in some states. All these factors have resulted in financial disorder of
the State Electricity Boards (SEBs).
3. Restoration of SEBs financial health and improvement in their operating
performance continues to be a critical issue. The Government of India has s i g n e d
a Me mo r a n d u m o f Un d e r s t a n d i n g ( MOU) wi t h v a r i o u s
s t a t e s reflecting the joint commitment of centre and states to undertake reforms in
a time bound manner
4. Poor return to utilities, which affect their profitability and capacity to
make further investments
5. Increasing gap between unit cost of supply & revenue, approximately
Rs1.10/ unit
6. Ma n a g e r i a l a n d f i n a n c i a l i n e f f i c i e n c i e s i n s t a t e s e c t o r
u t i l i t i e s h a v e adversely affected capacity addition and systems improvement
7. Non-availability of quality coal may hamper thermal plants efficiency in
power generation


OPPORTUNITIES:


1. I n d i a h a s s u b s t a n t i a l n o n - c o n v e n t i o n a l e n e r g y r e s o u r c e
b a s e a n d technologies to meet growing power requirements by tapping this
energy.
2. 100% FDI in all sectors allowed
3. Opportunity to sell generation to Trading company
4. 50,000 MW Hydro initiative launched
5. Ultra Mega Power Projects

THREATS :

1. I nabi l i t y of SEBs t o r ai s e f unds , as mos t of t he SEBs i s on t he
ver ge of bankruptcy due to poor operational performance. Adding to the problems,
SEBs need huge money to measure up competition from efficient private
players
2. The major risk of privatizing a critical sector like power is the precedence
of commercial over public int erest. Some of these interests that will take a
back s eat i ncl ude devel opment of envi r onment f r i endl y gener at i on
and pr ovi s i on of el ect r i ci t y f or r ur al ar eas . The new El ect r i ci t y
Act does not pr ovi de any s peci f i c f i nanci al i ncent i ves f or pr i vat e
pl ayer s t o addr es s public issues
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3. The SBEs which are right now holding 60% of total installed capacity,
will be hi t adver s el y by s ome pr ovi s i ons of t he new el ect r i ci t y act
s uch as delicensing of generation and open access for IPPs and CPPs,
there by such units will t ake away the most lucrative customers (like
industrial and commercial users) from the SEBs. This will not only affect
SEBs but also the entire power sector for near term.
4. Poor infrastructure has led to heavy T&D losses. Old and poor transmission and
distribution network has led to frequent power outages and poor quality of power


ADANI POWER LTD.
Company Name : Adani Power Ltd.
Industry : Energy
Founded : 22 August 1996
Headquarters :Ahmedabad, India
Key people : Gautam Adani, (Chairman)
Products : Electricity generation, transmission and distribution; energy trading
Revenue : 4,240 crore (US$845.88 million)(2012)
Net income : -294 crore (US$-0.06 billion)(2012)
Employees : 2,000 (2011)
Parent : Adani Group
Website : adanipower.com

Adani Power Limited is the power business arm of Indian business conglomerate Adani
Group with head office at Ahmedabad, Gujarat. The company is India's largest thermal
private power producer with capacity of 4620 MW and also it is the largest solar power
producer of India with capacity 40MW. Adani Power Limited is ranked 334th in top
companies in India in Fortune India 500 list of 2011.
The company currently operates five supercritical boilers of 660MW each (as per March
2012) at Mundra, Gujrat. It also operates a mega solar plant of 40MW at Surendra nagar,
Gujrat. It is India's first company to achieve the supercritical technology. Mundra is also the
WORLDS FIRST supercritical technology project to have received CLEAN
DEVELOPMENT MECHANISM (CDM) Project certification from United Nations
Framework Convention on Climate Change (UNFCCC).

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Power Generation
Mundra Thermal Power Project
Location : Mundra, District Kutchh, Gujarat, India
Capacity : 4620 MW
Phase I - 2 x 330 MW
Phase II - 2 x 330 MW
Phase III - 2 x 660 MW
Phase IV - 3 x 660 MW

The Mundra Thermal Power Project was conceived for the captive consumption of the
Mundra Port & SEZ, the largest single location Coal based Thermal Power Station in India
and one of the top five in the World. With the synchronization of Unit 1, Adani Power
Limited proved its project execution skills by developing Greenfield coastal power project in
a short span of 33 months from the date of NTP.
At present all the four units of Phase I and Phase II based on subcritical technology have been
commissioned and are Commercially Operational.
Adani Power created history by synchronizing the first-ever super-critical technology based
660 MW Unit (Unit 5 of Phase III) in India at Mundra. This is not only the first super-critical
turbine in the country but what makes it special is that this has been synchronized within 36
months from the inception, which is the fastest implementation ever by any power developer
in the country.
The entire project is scheduled to be fully operational within the 11th Five Year Plan (2007-
2012).
Further the project being at a coastal location shall use sea water with the implementation of a
desalinization unit, making efficient use of the water resources of India.
The Phase III of the Mundra Project, which is also based on supercritical technology, has
received Clean Development Mechanism (CDM) Project certification from United Nations
Framework Convention on Climate Change (UNFCCC). This is the worlds first project
based on super-critical technology to get registered as CDM Project under UNFCCC. This
state-of-the-art supercritical technology is 25% more efficient than conventional sub-critical
power plants and enables 20% reduction in CO2 emission.

Tiroda Thermal Power Project

Location : Tiroda, District Gondia, Maharashtra, India
Capacity : 3300 MW
Phase I - 2 x 660 MW
Phase II - 1 x 660 MW
Phase III - 2 x 660 MW
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The Tiroda Thermal Power Project of 3300 MW is being set up by Adani Power Maharashtra
Ltd (APML), a subsidiary of Adani Power Limited. all the units are based on supercritical
technology. The construction activities are in full swing and the first three units of the project
are planned to be commissioned within the XIth Five Year Plan (2007-2012) and the balance
two units in the first year of the XIIth Five Year Plan (2012-2017).
Kawai Thermal Power Project

Location : Kawai, District Baran, Rajasthan, India
Capacity : 1320 MW
The Kawai Thermal Power Project of 1320 MW is being set up by Adani Power Rajasthan
Limited, a subsidiary of Adani Power Limited. all the units are based on supercritical
FINANCIAL HIGHLIGHTS
The financial highlights of the company for the year ended on 31
st
march 2012 are
summarized as follows.
(Rs. in Crores)
Particulars For the year ended For the year ended
31stMarch,2012 31st
March, 2011
Column1 Column2 Column3 Column4 Column5

Income from operations 3949 2106

Other Income 291 88

Total Income 4240 2194

Operating & Administrative Expenses 3261 1046

Operating Profit before

Interest and Tax 979 1148

Financial Charges 788 317

Profit Before Tax 191 831

Exceptional Item 195 8

Profit after exceptional item 4 823

Provision for tax

(including deferred tax) 290 300
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Profit/(Loss) After tax 294 523


Profit & Loss account of Adani Power ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11 Mar '10 Mar '09 Mar '08


12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 3,948.90 2,106.43 434.86 0.00 0.00

Excise Duty 0.00 0.00 0.00 0.00 0.00

Net Sales 3,948.90 2,106.43 434.86 0.00 0.00

Other Income 96.08 105.19 31.93 0.00 0.00

Stock Adjustments 0.00 0.00 0.00 0.00 0.00

Total Income 4,044.98 2,211.62 466.79 0.00 0.00

Expenditure

Raw Materials 43.18 10.30 167.09 0.00 0.00

Power & Fuel Cost 2,264.49 704.36 0.00 0.00 0.00

Employee Cost 52.51 30.23 4.55 0.00 0.00

Other Manufacturing Expenses 72.16 35.46 8.06 0.00 0.00

Selling and Admin Expenses 0.00 103.81 9.57 2.81 0.00

Miscellaneous Expenses 277.13 6.49 0.99 0.01 1.47

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Total Expenses 2,709.47 890.65 190.26 2.82 1.47

Balance Sheet of Adani Power ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11 Mar '10 Mar '09 Mar '08


12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 2,180.04 2,180.04 2,180.04 1,841.98 702.08

Equity Share Capital 2,180.04 2,180.04 2,180.04 1,841.98 552.08

Share Application Money 0.00 0.00 0.00 0.06 36.06

Preference Share Capital 0.00 0.00 0.00 0.00 150.00

Reserves 3,848.75 4,142.67 3,619.60 448.85 694.15

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 6,028.79 6,322.71 5,799.64 2,290.89 1,432.29

Secured Loans 21,068.84 15,031.33 9,200.60 4,089.69 1,011.17

Unsecured Loans 5,874.03 2,314.73 548.50 900.00 0.00

Total Debt 26,942.87 17,346.06 9,749.10 4,989.69 1,011.17

Total Liabilities 32,971.66 23,668.77 15,548.74 7,280.58 2,443.46


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SWOT ANALYSIS OF ADANI POWER LTD.

Strengths
Strong execution track record on the back of the huge success of Mundra Port
The diversified nature of the Adani Group (especially its presence in ports and coal trading)
augurs well for Adani Power.
Stellar operational efficiency (FY10 average PLF was 85%+ compared with Indias national
average of 78%)
Minimal exposure to merchant power (23% compared with JSWs 56%)
Weakness
All of Adanis power plants use Chinese equipment
Conflict of interest given that other promoter owned companies are also in power
generation
Limited bargaining power vis a vis delays in coal supplies from Adani Enterprises as it is
Adani Powers holding company
Opportunities
private sector (this is equivalent to 10x Adanis installed capacity) and Adani Power will be
a relatively strong contender for these UMPPs
Given groups presence in coal mining and Indias rising coal imports, domestic coal
mining offers a huge opportunity for Adani Enterprises This in turn will reduce
Adani Powers coal cost as currently Adani Enterprises is the biggest supplier of coal to
Adani Power
Threats
The 5x increase in private sector generation capacity by FY13 could result in merchant
power rates getting compressed.
The rising Maoist insurgency (with its greatest influence in states having the largest coal
resources) could result in delays and higher costs.
The improving trend in T&D losses due to rising investment in T&D could result in the
fading of Indias power deficit at a quicker pace than expected.
STRATEGIES USED BY ADANI POWER
Adani Power seeks merger of APML shareholding entity : Adani Power Ltd (APL), a
power generation arm of Ahmedabad-based diversified business conglomerate Adani Group,
has decided to merge shareholding entity of Adani Power Maharashtra Ltd (APML) in Adani
Power. The move is aimed at making APML a 100 per cent subsidiary of APL.
APL currently holds 74 per cent stake in APML, a joint venture company floated to execute
3300 Mw power project at Tiroda in Maharashtra. Adani Power did not disclose the name of
its JV partner in APML, which it plans to merge with it. However, as per Adani Power's Red
Herring Propspectus filed with Securities and Exchange Board of India (SEBI) Millennium
Developers hold 26 per cent in APML. "In order to hold 100% of Adani Power Maharashtra
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Limited (as against current holding of 74%), it is decided to evaluate the proposal to merge
26% shareholding entity of Adani Power Maharashtra Limited in Adani Power Limited
subject to necessary permission and approvals in this regard," Adani Power said in a filing to
BSE. The shareholding entity of APML will be offered shares of Adani Power post its merger
with power generation arm of billionaire Gautam Adani promoted Adani Group.
Adani group eyes coal assets in Mozambique for $400 mn : Adani Enterprises, the
Gujarat-based Adani groups flagship firm, is in discussions with the Mozambique-based
NCondezi Coal to acquire a minority stake in its coal assets. The deal with the AIM-listed
NCondezi is expected to be in the range of $350-400 million (Rs 2,000-2,200 crore).
Standard Chartered Bank is advising NCondezi on finding a partner.
According to sources in the know, Adani Enterprises is looking to become a strategic
partner of NCondezi by acquiring a part of its assets. The acquisition is for its subsidiary,
Adani Power, which has targeted a 20,000-Mw expansion plan in the power sector by 2020.


REFERENCES :
1. http://www.tatapower.com/investor-relations/tpc_annual_83/
2. http://www.business-standard.com
3. http://www.moneycontrol.com/news/business/adani-power
4. http://indianpowersector.com/about/overview/
5. http://www.indexmundi.com/India/electricity_production.html
6. http://www.sebi.gov.in/dp/adanipower.pdf