Reasons why Adani Green share price is rising so fast!!
Power is one of the most important elements and plays a crucial role in the development of the country. It is also one of the diversified sectors of our economy. This is the reason why India is focussing on expanding its power generation capacity. Our government is also trying hard to build its power generating capacity from renewable resources.
On the other hand, Private sector also plays an important role in generating power as their role has increased rapidly in this sector in the last 3 years, which has led to an increase of around 30% in its renewable energy capacity.
Our Government is also looking forward to exploring more options to expand the share of renewable energy by 2030. Indian Industrialist Gautam Adani’s Adani Green Energy has been fortunate to pick India's biggest manufacturing solar program agreement from the Solar Power Corporation of India. With the help of this mega project, they will be able to create more employment in the Power sector and it is assumed that the capacity generated in this project would be around 7500 megawatts.
This is what we discussed about the Project that Adani Green has bagged and also about its implications and other factors related to the project.
Now let's also take a sneak peek at how the company has been performing for the past few months.
Adani Green Energy's Performance- A Sneak Peek
We are all aware of the fact that the shares of the company have witnessed tremendous growth recently. If we take a look at the records, the company has given 856% return in a year which reflects a symbol of their continuous growth.
With the rise in their share prices, the Market Capitalisation of the company has also seen good growth.
Today their Market Cap is around 179000 crore and undoubtedly they fall under the biggest companies of India. This is attracting a lot of people to invest in their company.
Top Reasons Behind the Sudden Rise in the Adani Green Energy Company's Shares
It's quite evident from the aforementioned lines that Adani Green Energy Limited has got a sudden hike in the company's share. So, now the question arises- how? Well, the reasons are listed below:
- The most significant and recent achievement received by Adani Green is the Mega Project from Solar Energy Corporation of India which is around 1 Gigawatt.
- The size of this entire Project is around 45000 crore, and the share price of the company witnessed a huge rise after getting this project.
- After getting this contract, their share price rose almost by 3%
- Soon after they got the Power Project, Solar Energy Corporation of India signed a guaranteed power purchase agreement with Adani’s which says that the power generated by the company will go to the SECI ( Solar Energy Corporation of India) at a fixed price.
- Post the deal, it was revealed that SECI had not committed any such thing, this clearly means that SECI is not bound to buy power from the project.
- Now Adani’s will have to look for a buyer to sell their power, and in the absence of a buyer, the 45000 crore deal will look risky.
- Another reason for the rise in their share prices is the Public shareholding which is only 2.4% which is way less as compared to the market average price.
- Their 22.4 % share is with the Foreign Institutional Investors and the company has few domestic institutional investors.
- One more reason for the rise in their share price is that a lot of people are of the view that Adani Green will surely become the most powerful renewable energy company.
On the other side, there are many big names like the Tata Group are also trying to explore their hand in the power sector, and they are leaving no stone unturned to make a mark in the Power sector. To fulfil this dream, they are also investing huge amounts of money to grow in this field. We all know since Tata is a bigger name, they could be a strong challenge for the Adani’s.
Although In terms of market value, the Adani Group firm has surpassed Bajaj Finserv, Hindustan Zinc, Bharat Petroleum Corp Ltd, Power Grid Corp, ONGC Ltd, NTPC, Britannia Industries Ltd and Dabur India.
But if we look at the financial growth of the company, they are under a huge debt of around 19000 crores, which would later be a strong hurdle if they want to grow with this power project. Currently, Tata Power is trading on a ratio of 18, and Adani’s Price to earning ratio is 4651 which is way higher as compared to other companies.
Did you enjoy what you read? Subscribe to our newsletter and get content delivered to you at your fingertips!!