Adani Green Energy surpasses Rs 2 lakh crore m-cap; what’s next?

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Adani Green Energy has joined the elite club of companies commanding a market valuation of Rs 2 lakh crore, helped by a continuous rally in its share price. The company is also Adani Group’s most valued firm in terms of market valuation.

Shares of Adani Green Energy surged 5% to Rs 1313.60 on Tuesday, while the benchmark BSE Sensex was up 0.19% at 49,896 in the afternoon trade at around 12.10 pm (IST). Overall, the scrip has rallied 4368% since its the company’s demerger with Adani Enterprises. It was at around Rs 29.40 in June 2018.

Going with market watchers, the interest of retail investors mainly drove the Adani Group of stocks to sky-high levels. Kranthi Bathini, an equity strategist at WealthMills Securities said, “Retail frenzy aided Adani Green in the recent past. Investors should focus on cash flow for further movement in the stock price.” At present, the stock is hovering at a price-to-earnings ratio of 663.53 times, while the price-to-book value is at 83.51.

On the other hand, some analysts said they do not track Adani Green Energy.

With a market capitalisation of Rs 2.05 lakh crore, Adani Green is now the 18th largest company on BSE after L&T and UltraTech Cement. The first is just shy of the country’s biggest carmaker Maruti Suzuki whose market value is hovering at around Rs 2.16 lakh crore.

Shares of the company hogged the limelight this week after the firm on Monday announced that its arm has received a letter of award for a 300 MW wind power project under a tender of Solar Energy Corporation of India (SECI).

“AREHFL, a subsidiary of the Adani Green Energy (AGEL), had participated in the tender issued by SECI for setting up 1,200 MW ISTS-connected wind power project (Tranche-X) and received the letter of award (LOA) to set up 300 MW wind power project under this tender,” the company said in a statement on Monday.

The fixed tariff for this project capacity is Rs 2.77/kWh for a period of 25 years, it added.

With this, AGEL’s total renewable capacity now stands at 15,165 MW, of which 3,395 MW renewable plants are operational and 11,770 MW projects are under implementation.

Promoters held 74.92% stake in the company as of December 31, while public shareholders had 25.08%.