A TERM PAPER ON

ADANI POWER
SUBJECT

STRATEGIC MANAGEMENT
SUBMITTED
BY

MANOJ J BAGRECHA
1PT13MBA22
TO

PROF. M G VEDVYASA
FACULTY
MASTER OF BUSINESS ADMINISTRATION

P.E.S INSTITUTE OF TECHNOLOGY

BANGALORE-560085

ADANI POWER

Type

Public

Industry

Energy

Founded

22 August 1996

Headquarters

Ahmedabad, India

Key people

Gautam Adani, (Chairman)

Vineet S Jain, (CEO)
Electricity generation, Transmission
and Distribution; Energy trading

Products

Adani Power Limited is the power 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 7920 MW and also it is the
largest solar power producer of India with capacity 40 MW. Adani Power
Limited is ranked #334 in top companies in India in Fortune India 500 list of
2011.
It is India's first company to achieve the supercritical technology. The plant is
the only thermal power plant in India to be certified by UN under CDM.

CEOs message: Believe in passion

Power Business of Adani Group has witnessed several achievements as well as
challenges since its inception and yet the journey continues on the chosen
path. Team Power believes in Passion, Speed and Quality in every endeavor of
the organization. The team has established benchmarks in various areas and is
continuously in pursuit of excellence. Words like First, Largest, Top, etc have
become its identity.
The recent times have been very eventful. Many lessons have been learnt,
initiatives taken and benchmarks established. The current scenario in power
sector and our long term plans present several challenges but we are
committed to re-energized actions and further refined competencies to meet
them.
We believe that challenges are a part of our professional life and provide us
with the opportunity to excel. I foresee a brighter and exciting times ahead
when many more milestone shall be crossed by Team Power. I believe in our
peoples strength, which has been evident on many occasions. Its the
people, in the organization who make miracles happen and they shall continue
to empower the organization to make it the best in the business.

Vision:
To be the globally admired leader in integrated Infrastructure businesses with a
deep commitment to nation building. We shall be known for our scale of
ambition, speed of execution and quality of operation.

Mission:
To assimilate knowledge, develop capabilities and manage collective enterprise
to profitably tap global commercial opportunities and advantages for the
benefit of stakeholders and society.

Values:
Courage: we shall embrace new ideas and businesses
Trust: we shall believe in our employees and other stakeholders
Commitment: we shall stand by our promises and adhere to high
standard of business.

Culture:
Passion: Performing with enthusiasm and energy.
Results: Consistently achieving goals.
Integration: Working across functions and businesses to create
synergies.
Dedication: Working with commitment in the pursuit of our aims.
Entrepreneurship: Seizing new opportunities with Initiative and
Ownership.

BALANCE SHEET (in crores)

Particulars
Revenue
Profit Before Tax
(PBT)
Tax
Profit After Tax
(PAT)
EPS (in)

2013-14

2012-13

2011-12

11304.56
-465.37

6868.09
-1493.71

4194.27
-3.62

-1060.63
595.26

458.32
1952.03

290.3
-293.92

2.13

-8.16

-1.35

SWOT ANALYSIS OF ADANI POWER:

Strengths:
Strong Business Operations
Significant Asset Base
Improved Financial Performance

Weaknesses:
Dependency on Thermal Fuel Sources
Weak Liquidity Position

Opportunities:
Renewable Power Development
New Project Development
Growing Power Demand in India

Threats:
Regulatory Norms
Competitive Environment
Volatility in Commodity Pricing

PORTERS FIVE FORCES ANALYSIS POWER SECTOR:

Potential
Entrants (Threat
of Mobility)
(Low)

Suppliers
(Supplier Power)
(High)

Industry Rivalry
(Medium)

Substitutes
(Threat Of
Substitutes)
(Medium)

Buyers (Buyer
Power)
(Medium)

The Intensity of Competitive Rivalry within the Industry:

Power producing companies No competitive rivalry as demand for power
is way above its supply and all the power generated is used up.
However, with government encouragement, private participation is
expected to increase in the coming years to take advantage of huge
demand for power
Power equipment market - Market leader like BHEL is facing tough
competition from L&T, Alstom, Doosan and most importantly Chinese
suppliers.
Major orders of Boiler, Turbine and Generator grabbed by Chinese
suppliers from most of the private sector clients.
So overall the intensity of competitive rivalry is medium.

The Threat of the Entry of New Competitors:

Highly capital-intensive industry and hence demands huge investment
Power producers Behemoth like NTPC, SEBs contributing around 85 % of
total power produced.
Ditto for Power Grid Corp. of India in Transmission and Distribution
Segment.
Major plans by big companies like Reliance power, Adani power, Lanco etc.
to make a entry into power sector after market opened up for private
sector through Electricity Act 2003 and subsequent reforms.
However obtaining regulatory approvals, fuel linkages, land etc. still remain
the major bottlenecks.
Hence the threat of new entrant appears to be low.

The Threat of Substitute Products or Services:

Power does not have substitute but it can be generated from different
sources of energy.
Currently thermal power is dominant in India, coal being the major raw
material.
Coal availability is limited and therefore power from nuclear, hydro and
other renewable sources could be used as substitute for thermal power in
future.
Agreements with various countries for nuclear collaboration will give major
impetus to Nuclear power plants.
Although demand for power outstrips its supply, going forward, thermal
power plant companies have threat from non-thermal power generators.
Hence the threat of substitute products is medium.

The Bargaining Power of Suppliers:

Coal is majorly used as a feed for generating power.
The supply of coal in India is limited and hence coal players are in dominant
position.
Power companies are required to import coal if the domestic supply is not
sufficient, which proves to be an expensive affair.
With companies like Lanco, Adani Power buying coal mines in Indonesia,
Australia etc. to import better grade coal than available in India, market
dominance of Govt. Companies like Coal India will subside gradually.
However looking at the present situation, the power of suppliers is high.

The Bargaining Power of Buyers:

Industrial consumers have huge demand for power
Their bargaining power is low in India as the number of power companies
to buy from is limited in number. Hence power companies are in better
position.
Retail customers -Government regulates the power sector to ensure supply
of power at reasonable prices but this regulation is limited.
Peak shortage is much more in every region and it is about 12 % on all India
bases which allow suppliers to dictate terms with the buyers.
Overall, the bargaining power of buyers is Medium.