Adani Transmission to raise ₹1,500 cr via NCDs; stock falls 3% on weak Q2

Shares of Adani Transmission dropped nearly 3% in opening trade on Thursday, a day after the country’s largest private transmission company released its earnings results for the September ending quarter and unveiled a plan to raise capital worth ₹1,500 crore by issuing non-convertible debentures (NCDs). The board of billionaire Gautam Adani-led company on Wednesday granted approval for issuance of NCDs for an amount not exceeding ₹1,500 crore in one or more tranches, subject to requisite approvals.

Reacting to Q2 earnings, the share price of Adani Transmission (ATL) declined as much as 2.63% to ₹3,221.20, against the previous closing price of ₹3,308.45 on the BSE. In comparison, the BSE benchmark Sensex was trading 106 points lower at 60,799 levels.

The stock currently trades 24% lower than its 52-week high of ₹4,238.55 touched on September 16, 2022. It hit a 52-week low of ₹1,652 on December 31, 2021. The market capitalisation fell to ₹3.64 lakh crore.

The share price of ATL, the sixteenth largest company by market cap, has delivered 77% returns to its shareholders in the past one year, while it surged 88% in the calendar year 2022. In the last six months, the largecap stock climbed 17%, while it rose 4% in a month.

The Adani Group company on Wednesday reported a 32.7% year-on-year (YoY) decline in its consolidated net profit at ₹194 crore for the second quarter ended September 30, 2022, weighed down by an adverse forex movement of ₹138 crore (mark-to-market adjustment on foreign currency loans). The electric power transmission company had posted a net profit of ₹289 crore in the same period last year.

Consolidated revenue rose 22.3% to ₹3,032 crore in Q2FY23, from ₹2,479 crore in the corresponding period last year, on the back of operationalisation of new transmission lines and higher energy demand.

During the quarter under review, consolidated operational EBITDA grew 7.1% to ₹1,241 crore as against ₹1,289 crore in the year-ago period.

Segment wise, the transmission business operational revenue rose 10.1% YoY to ₹868 crore, driven by newly commissioned lines over the period. Distribution business revenue increased 28% YoY to ₹2,164 crore, on account of a significant jump in energy demand.

As per the company, the power major operationalised 352 circuit kilometre (ckm) in Q2FY23 and maintained system availability at 99.76%. The energy demand (units sold) improved by 13% YoY in Q2FY23, driven by a rise in commercial and industrial segment demand, it added.

Commenting on Q2 earnings, Anil Sardana, MD & CEO, Adani Transmission, said, “…ATL’s growth trajectory remains firm despite the challenging macro environment. Our pipeline of projects and recently operationalised assets will further strengthen our pan-India presence and consolidate our position as the largest private sector transmission and distribution company in India. ATL is consistently benchmarking to be the best-in-class and is pursuing disciplined growth with strategic and operational de-risking, capital conservation, ensuring high credit quality and business excellence with high governance standards.”

The company, the transmission and distribution business arm of the Adani Portfolio, has pledged to become net zero by 2050 and aims to limit global warming to 1.5°C above pre-industrial levels through measurable actions.