Adani Enterprises Limited primarily engages in trading, energy, real estate and agro-related

operations. It
involves in trading edible oils; and agro-commodities, including food grains, castor oils, pulses, soya
meals,
rapeseed meals, and castor meals, as well as involves in edible oil refining business. The company also
offers integrated storage, handling, and transportation infrastructure for food products. In addition,
it
engages in developing integrated townships, and commercial and residential properties; and provides
logistics solutions for handling a range of cargos through a network of container terminal and ICDs.
Further, the company involves in oil and gas exploration, power trading and transmission, coal
mining, and
coal trading activities. Additionally, it engages in the supply of natural gas to industrial, commercial,
domestic, and CNG customers; provision of port based logistics services for cargos and vessels; and
development of port based special economic zones, as well as provides IT enabled services. The
companywas formerly known as Adani Exports Limited. Adani Enterprises Limited was founded in
1988 and is
headquartered in Ahmedabad
STRENGTH
Well established and vast transmission and
distribution network.
Highly qualified engineering and technical personnel.
Regulatory framework is further facilitated with
enactment of Electricity Bill, 2003.
The Electricity Bill, 2003 holds promises for the power
sector and certainly for the consumer by way of
competition reliability and rationalized
tariff structure.
Emergence of strong and globally comparable central
utilities (NTPC, POWER GRID).

Strong execution track record on the back of the huge success of Mundra Port
The diversified nature of the Adani Group (especially its presence in ports and
coal trading) augurs well for Adani Power.
Stellar operational efficiency (FY10 average PLF was 85%+ compared with
Indias national average of 78%)
Minimal exposure to merchant power (23% compared with JSWs 56%)
The diversified nature of the Adani Group helps in the growth of Adani Power
2. Most of the equity share capital and Debt has been invested in the creation
of assets which are operational. This has led to Increasing Revenues YoY. This
shows a strong Project - Execution record
3. Operating Profit to Sales ratio for Adani Power is higher than the National
average. This indicates higher Operational Efficiency of Adani Power
4. Since the largest supplier of coal is Adani Enterprises, this reduces the cost of
coal to Adani Power
5. One of the major players in the Indian power industry
6. Has a small yet effective workforce of approx 2000 employees

WEAKNESS :

Lack of proper metering and theft has led to large scale losses. Only 51%of the power
generated is billed and only 41% is realized
Moreover, Government provides power to agricultural sector at subsidized rates and also
free of cost in some states. All these factors have resulted in financial disorder of the State
Electricity Boards (SEBs).
Restoration of SEBs financial health and improvement in their operating performance
continues to be a critical issue. The Government of India has signed a Memorandum of
Understanding (MOU) with various states reflecting the joint commitment of centre and
states to undertake reforms in a time bound manner
Poor return to utilities, which affect their profitability and capacity to make further
investments
Increasing gap between unit cost of supply & revenue, approximately Rs1.10/ unit
Managerial and financial inefficiencies in state sector utilities have adversely affected
capacity addition and systems improvement
Non-availability of quality coal may hamper thermal plants efficiency in power
generation

All of Adanis power plants use Chinese equipment
Conflict of interest given that other promoter owned
companies are also in power generation
Limited bargaining power vis a vis delays in coal
supplies from Adani Enterprises as it is Adani Powers
holding company
Present only in very few states namely Gujarat,
Maharashtra and Haryana
2.Has a very low market share even compared to the
private players like Tata Power and Reliance Power

OPPORTUNITY
India has substantial non-conventional energy
resource base and technologies to meet growing power
requirements by tapping this energy.
100% FDI in all sectors allowed
Opportunity to sell generation to Trading company
50,000 MW Hydro initiative launched
Ultra Mega Power Projects

private sector (this is equivalent to 10x Adanis installed capacity)
and Adani Power will be a relatively strong contender for these
UMPPs
Given groups presence in coal mining and Indias rising coal
imports, domestic coal mining offers a huge opportunity for
Adani Enterprises This in turn will reduce
Adani Powers coal cost as currently Adani Enterprises is the
biggest supplier of coal to Adani Power
Can diversify into Hydro-electric power generation
2.Adani Group has a presence in coal imports and coal mining.
This offers a significant opportunity for Adani Power to expand
its operations and compete with other contenders for UMPPs
3.Opportunity to establish presence in other parts of the country

THREAT
Inability of SEBs to raise funds, as most of the SEBs is on the verge
of bankruptcy due to poor operational performance. Adding to the problems,
SEBs need huge money to measure up competition from efficient private
players
The major risk of privatizing a critical sector like power is the precedence
of commercial over public interest. Some of these interests that will take a back
seat include development of environment friendly generation and provision of
electricity for rural areas. The new Electricity Act does not provide any specific
financial incentives for private players to address public issues
The SBEs which are right now holding 60% of total installed capacity, will be
hit adversely by some provisions of the new electricity act such as delicensing
of generation and open access for IPPs and CPPs, there by such units will take
away the most lucrative customers (like industrial and commercial users) from
the SEBs. This will not only affect SEBs but also the entire power sector for near
term.
Poor infrastructure has led to heavy T&D losses. Old and poor transmission
and distribution network has led to frequent power outages and poor quality of
power

The 5x increase in private sector generation capacity by
FY13 could result in merchant power rates getting
compressed.
The rising Maoist insurgency (with its greatest influence
in states having the largest coal resources) could result in
delays and higher costs.
The improving trend in T&D losses due to rising
investment in T&D could result in the fading of Indias
power deficit at a quicker pace than expected.
Changes in International prices of coal.
2.Changes in International policies regarding import of
coal.
3.Increase in private sector power generation could lead to
compressed rates of merchant power










POLITICAL

1. Government is encouraging private players to produce power and also carry
out its transmission and distribution activities. There has been significant
Increase in private participation.
2. Indistinctness involved in complicated tariff rates has been done away with
by the government.
3. Regulatory authorities like Central Electricity Regulatory Commission
(CERC) & State Electricity Regulatory Commission (SERC) are appointed, to
regulate the power industry at centre and state level
4. The Indian government has set large scale goals in the 11th plan for power
sector due to which the power sector is poised for significant expansion.
5. Unbundling of the State Electricity Boards into separate Generation,
Transmission and Distribution units and privatization of power distribution
has been initiated either through the direct privatization or the franchisee
route. While there has been a slow and gradual improvement in metering,
billing and collection efficiency, the current loss levels still pose a significant
challenge for distribution companies.

ECONOMICAL

In order to provide availability of over 1000 units of per capita
electricity by year 2012, it has been estimated that need-based
capacity addition of more than 100,000 MW would be required.
This has resulted in massive invstment plans being proposed in
the sub-sectors of Generation Transmission and Distribution
2. The Ministry of Power plans to establish an integrated
National Power Grid in the country by 2012 with close to 200,000
MW generation capacities and 37,700 MW of inter-regional
power transfer capacity. Considering that the current inter-
regional power transfer capacity of 20,750 MW, this is indeed an
ambitious objective for the country.
3. For increasing the generation capacity over the next 8-10
years, the corresponding investments in the transmission sector
is also expected to expand
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 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.

STRATEGIES USED BY ADANI
POWER

Adani Power seeks merger of APML shareholding entity : Adani Power Ltd (APL), a power
generation arm of Ahmedabad-based diversified business conglomerate Adani Group, has decided to
merge shareholding entity of Adani Power Maharashtra Ltd (APML) in Adani Power. The move is
aimed at making APML a 100 per cent subsidiary of APL.APL currently holds 74 per cent stake in
APML, a joint venture company floated to execute 3300 Mw power project at Tiroda in Maharashtra.
Adani Power did not disclose the name of its JV partner in APML, which it plans to merge with it.
However, as per Adani Power's Red Herring Propspectus filed with Securities and Exchange Board of
India (SEBI) Millennium Developers hold 26 per cent in APML. "In order to hold 100% of Adani
Power Maharashtra Limited (as against current holding of 74%), it is decided to evaluate the proposal
to merge 26% shareholding entity of Adani Power Maharashtra Limited in Adani Power Limited
subject to necessary permission and approvals in this regard," Adani Power said in a filing to BSE. The
shareholding entity of APML will be offered shares of Adani Power post its merger with power
generation arm of billionaire Gautam Adani promoted Adani Group.

Adani group eyes coal assets in Mozambique for $400 mn : Adani Enterprises, the Gujarat-based
Adani groups flagship firm, is in discussions with the Mozambique-based NCondezi Coal to acquire a
minority stake in its coal assets. The deal with the AIM-listed NCondezi is expected to be in the range
of $350-400 million (Rs 2,000-2,200 crore). Standard Chartered Bank is advising NCondezi on finding
a partner.
According to sources in the know, Adani Enterprises is looking to become a strategic
partner of NCondezi by acquiring a part of its assets. The acquisition is for its subsidiary, Adani
Power, which has targeted a 20,000-Mw expansion plan in the power sector by 2020.