In late 2024, US authorities alleged that Adani Group Chairman Gautam Adani, along with other senior staff, was involved in a scheme to pay bribes to secure power supply contracts in India, misleading investors in the United States as a result.
Adani and some other colleagues remain under indictment in the United States and it is not clear how the situation will develop in 2025. Near term, the indictments could hinder Adani Group’s attempts to raise capital, particularly internationally. Despite this, India’s leading integrated energy and infrastructure conglomerate, which reported a strong year in 2024, said it expects that performance to continue.
“Capital is no longer a constraint. Our true challenge lies in deploying capital effectively,” said the chairman at the center of the allegations in his New Year message to staff. “To overcome this, we must prioritize technology and talent.”
Adani said the business shattered financial records in 2024 – a year in which it also faced extraordinary challenges. The chairman added that the group’s financial position has never been more robust.
His message appeared to be aimed at allaying concern about Adani Group’s project-funding challenges, following the US indictment of Adani and others in the alleged bribery case.
The US indictment accuses the Adani chairman and others of leading a scheme to bribe Indian officials to secure solar power contracts and of concealing those actions while seeking capital from US-based and global investors.
Adani Group has termed the bribery allegations “baseless” and vowed to pursue “all possible legal recourse.” However, there has already been fallout from the allegations. French energy giant TotalEnergies – which is a 19.75% shareholder of Adani Green Energy Ltd (AGEL) and a 50% joint-venture partner in project companies with AGEL – announced that it would not make any new financial contributions as part of its investment in the Adani Group of companies until the accusations against the Adani individuals and their consequences had been clarified.
AGEL said that it is not in discussion with TotalEnergies for any fresh investment. Hence, TotalEnergies’ statement would not have any material impact on the company’s operations or its growth plan, it claimed.
Adani Group is among the most ambitious players in India’s renewable energy industry, with plans for solar manufacturing that will be vertically integrated all the way from polysilicon to module assembly and PV project development. With the plans it has already announced, Adani alone could meet around 10% of India’s 2030 target of 500 GW of power generation capacity from non-fossil fuel sources. The group currently has an operational renewable energy capacity portfolio of more than 11 GW, which it aims to increase to 50 GW by 2030.
It is developing what it calls the world’s largest renewable energy project, with a capacity of 30 GW, at Khavda in Kutch, Gujarat. Built across 538 km², the project footprint is almost as large as Mumbai. AGEL recently announced the commissioning of 2.4 GW of mixed solar and wind generation capacity at the location. Once complete, AGEL said the site will be the world’s largest power plant.
Financial clout
Adani Group has pledged to invest $100 billion through 2035 in the energy transition and to further expand its integrated renewable energy value chain.
Adani New Industries Ltd., the green hydrogen unit of Adani Enterprises, is building a massive, integrated manufacturing ecosystem for the generation of low-cost green hydrogen. That plan will encompass 10 GW per year of metallurgical grade silicon, polysilicon, ingots, wafers, cells, and modules, as well as wind turbines, electrolyzers, and ancillary components. Economies of scale are meant to facilitate the lowest cost green hydrogen.
Of the announced annual manufacturing capacity, 2 GW of ingot and wafer production lines have been operational since March 2024. Adani also has 2 GW of annual tunnel oxide passivated contact (TOPCon) cell and module production capacity and another 2 GW of older, passivated emitter rear cell (PERC) cell and module capacity. The group’s solar module sales in April through September 2024 hit 2.38 GW, of which 1,082 MW were domestic and 1,298 MW were exported. That marked 91% year-on-year growth.
AGEL posted a consolidated net profit of INR 5.1 billion ($58.9 million) in the July-September 2024 quarter, a 39% increase year on year. Consolidated revenue from operations increased 16.33%, year on year to INR 23.1 billion.
The US indictment came soon after Gautam Adani, in November 2024, announced his group’s plans to invest $10 billion in US energy security and infrastructure projects, creating up to 15,000 jobs in America. As a result of the indictment, Adani Group may face increased scrutiny overseas as it looks to raise funds for its projects, raising questions about whether that will delay the group’s expansion ambitions, domestic and abroad.
The company’s recent announcement that it intends to raise INR 71.4 billion from the sale of up to 20% of food and beverage business Adani Wilmar was seen as a green energy and infrastructure fundraising exercise based on exiting other, non-core sectors. The group generated around INR 48.5 billion from the initial, 13.5% sell-off of the food business.
Regarding its debts, Adani Group announced on Nov. 25, 2024, that each of its portfolio companies had sufficient liquidity to cover all debt-servicing requirements for at least the following 12 months.
“The group’s cash reserves now stand at INR 53,024 crore [INR 530.24 billion] – 20.53% of gross debt,” said the business. “This amount is sufficient to cover [the] next 28 months of debt servicing requirements.”
The group has also found support from American investor GQG Partners, which has stakes in Adani Group companies. GQG said it doesn’t see the US indictment as having a material impact on Adani Group operations. It claimed the businesses were well-positioned for the future, as their fundamentals remained sound.
Notwithstanding the indictment, green energy will likely remain central to Adani Group’s growth plans. To fund its ambitious renewable energy projects, the group has adopted the strategy of diversifying its funding sources. That means it should be able to bank on the domestic debt route and investment from non-US markets in the short term.
“The group has tended to seek debt funding for most of their projects through international banks and capital markets, which are both likely to be a bit cautious until we see a clear resolution of the SEC [US Securities and Exchange Commission] case,” said independent consultant Vinay Rustagi. “In the interim period, the company may use the domestic debt route, which still remains open and has sufficient appetite for the sector.”
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