ADANI TRANSMISSION Chairmans Speech

Chairman''''s statement


"Be not afraid, for all great power throughout the history of humanity has been with the people. From out of their ranks have come all the greatest geniuses of the world. Be not afraid of anything. You will do marvelous work!" - The visionary Swami Vivekananda


The philosophy of this great visionary appears more relevant now than ever before.


India stands at a rare inflection in its existence when there is a coming together of political stability, national vision and economic reforms. We believe that India will retain its position as the world''''s fastest growing economy; from a sect oral perspective this means that there will be larger demand for electricity; the conventional preference for generating electricity will have to be balanced with a corresponding increase in power transmission sector investments.


India''''s transmission network as on March 2017 was 367851 circuit kilometers of transmission and 740765 MVA of sub-station capacity fed by 326.8 GW of generating capacity as in March 2017.


While generation has grown more than 11% since March 2011, transmission capacity has grown less than 7% since then. The ratio of investment in transmission and distribution to power generation has remained at less than 50%.


The long-standing skew between power generation and transmission is now reflected in regional imbalances. Northern and Southern India are expected to suffer an aggregate deficit of 31.5 to 41.1 GW and 13 to 19.1 GW respectively. It will thus become imperative to import power from power-surplus regions in India. With this in view, we believe that the Central Government will make unprecedented investments to raise inter-regional transmission capacity from 59.5 GW in March 2016 to 91 GW in March 2022. Besides, India plans to increase renewable energy capacity from 57 GW in FY2016-2017 to 175 GW by 2022, one of the largest global investments in renewable energy, warranting specialized corridors for power evacuation. This increase will be in addition to a large share of India''''s 3.40 lacs circuit kilometer network of legacy ACSR conductors which will need to be upgraded.


I am pleased to state that the Indian government is addressing this national priority with the urgency it deserves. It has introduced several policy changes, including amendments to the Electricity Act, coal auction and allocation, Integrated Power Development Scheme, Ujwal DISCOM Assurance Yojana and Deendayal Upadhyaya Gram Jyoti Yojana.


The UDAY scheme was launched to improve the financial health of DISCOMS and power demand. The scheme will enhance distribution efficiencies, moderate power costs, reduce discom interest outflow, strengthen much-needed financial discipline, align consumer tariff with power generation costs and restructure the large debt of utilities. On the other hand, the DDUGJY scheme will enhance rural power supply and strengthen sub-transmission and distribution systems by separating electricity feeders for domestic and agricultural consumption. The country will need nine high capacity green-transmission corridors to evacuate and synchronies the grid across electricity produced from renewable and conventional sources.


I am pleased that this transformation in intent has been carried forward faithfully in policy content. All projects


are now awarded through international tariff-based competitive bidding and for an increased concession period by ten years to 35 years; there has been a relaxation in norms to accelerate project construction and development timelines; there is a stronger payment security mechanism that protects the interests of asset owners; the transmission sector share in power sector investments is expected to increase from 20% (FY2012-16) to 33% (FY2017-21); of the 34 inter-state transmission projects awarded through competitive bidding, 26 projects were awarded to the private sector.


As India''''s largest private transmission player, Adani Transmission is expected to capitalize most effectively on this national and sectoral transformation. In the last five years, we invested ~US$2 billion in this business. We currently operate around 5448 circuit kilometer of transmission lines. We have invested in the latest technologies resulting in the highest network availability of over 99.8% in the country, which corresponds to the best global standards.


At the end of the year FY 2015-16, the Company had 5050 circuit kilometers of operational transmission systems addressing power needs in Northern and Western India. I am pleased to state that the revenues for FY 2016-17 were RS,2901.55 crores and bottom-line RS,416.43 crores. Our operational EBIDTA margin of 93.34% was one of the best in the sector.


To take the growth ahead, the Company is constructing 2369 circuit kilometers in Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand and Bihar, which were awarded through a Tariff Based Competitive Bidding process. During the current year, we acquired GMR''''s transmission assets in Rajasthan. Following the completion of our under construction projects and acquisitions, our network is expected to increase to 10425 circuit kilometers, which brings us closer to our stated 2020 target of 13,000 circuit kilometers of transmission lines well ahead of schedule.


I am happy to report that in this business of critical national importance, this sector has a lot of untapped potential. The government has outlined a US$53bn investment plan in the country''''s transmission sector over five years, the largest ever in a compressed time-frame. The space is marked by only a handful of large Indian players.


Adani Transmission is attractively placed to capture the vast upside: we are possibly the fastest-growing power transmission company in the world. We enjoy a leadership position in India''''s private power transmission sector. We possess a robust Balance Sheet that provides a combination of accruals and the opportunity to mobilize additional debt to grow the business. We have established operating benchmarks that that are among the best in the country, a competence that promises to protect long-term competitiveness. We intend to sustain our momentum to own and operate 20,000 circuit kilometre lengths with a corresponding asset value of RS,40,000 crore by 2022.


At Adani Transmission, we believe that community welfare and environment responsibility must be reconciled with corporate growth. The result is that we are proud of having transformed destinies of 1 lac students, 6 lac healthcare beneficiaries, and more than 11 lacs people across 1470 villages through better physical and social infrastructure.


Our company is driven by a vision to be the globally admired leader in the transmission business with a deep commitment to nation building. We shall be known for our scale of ambition, speed of execution and quality of operations. The business outlook appears attractive and I would like to thank our customers, employees, shareholders, bankers, governments and the Board for their continued support.


Gautam Adani


Chairman

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
“2019 © COPYRIGHT DYNAMIC EQUITIES PVT. LTD.”

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

  • Download our Mobile App
  • Available on Google Play
  • Available on App Store
  • RSS