Adani Energy Solutions wins Rs 2,800cr transmission project in Gujarat

Adani Energy Solutions Limited (AESL) has secured a significant ₹2,800 crore power transmission project in Gujarat, a move that strengthens India‘s transition toward renewable energy. The project, officially acquired on March 20, 2025, will play a crucial role in supplying electricity for Green Hydrogen and Green Ammonia manufacturing in Mundra, reinforcing Gujarat’s position as a hub for clean energy production.

With Adani Energy Solutions executing a Share Purchase Agreement (SPA) with PFC Consulting Limited (PFCCL) for the 100% acquisition of Mundra I Transmission Limited (MITL), the company has expanded its portfolio of high-capacity infrastructure projects. The Transmission System for Green Hydrogen/Ammonia Manufacturing Potential in Mundra involves the construction of a 75-km, 765kV double-circuit transmission line linking the Navinal (Mundra) substation to the Bhuj substation. Additionally, two 765/400kV transformers will be installed to enhance power distribution in the region.

As a result of this acquisition, AESL’s total order book has surged to ₹57,561 crore, solidifying its position as India’s largest private power transmission company. This development underscores AESL’s strategic focus on supporting India’s National Green Hydrogen Mission, a government-led initiative aimed at making India a global leader in Green Hydrogen production and export.

How Will the Transmission Project Drive Green Hydrogen and Ammonia Manufacturing?

Green Hydrogen and Green Ammonia have emerged as cornerstones of India’s decarbonization strategy, offering sustainable alternatives to fossil fuels in industries such as steel, chemicals, and transportation. Gujarat, particularly the Mundra region, has been earmarked for large-scale hydrogen production due to its favorable infrastructure, abundant renewable energy potential, and proximity to industrial consumers.

The newly secured transmission project is expected to provide reliable power for 3 GW of renewable energy capacity at the Navinal substation, with a potential scale-up to 4.5 GW in the Mundra area. This expanded transmission network will ensure uninterrupted power supply, a critical requirement for electrolyzers that generate Green Hydrogen through water electrolysis powered by renewable electricity.

AESL’s investment also aligns with India’s ambition to reduce reliance on imported fossil fuels and position itself as a key exporter of Green Hydrogen and its derivatives. With countries like Germany, Japan, and South Korea actively seeking partnerships to source clean hydrogen, the successful execution of this project could accelerate India’s emergence as a major player in the global hydrogen economy.

What Does This Mean for AESL’s Business Growth and Market Position?

Adani Energy Solutions, a subsidiary of the Adani Group, has been aggressively expanding its transmission, distribution, and smart metering businesses. The company operates a transmission network spanning 25,928 circuit kilometers (ckm) with a total transformation capacity of 87,186 MVA, making it the largest privately owned transmission entity in India.

Beyond transmission, Adani Energy Solutions has been scaling its footprint in retail electricity distribution, serving 13 million consumers across Mumbai and the Mundra SEZ. The company’s expertise in smart metering technology and energy-efficient solutions positions it at the forefront of India’s evolving power sector.

Winning the Mundra transmission project adds further strength to AESL’s infrastructure portfolio, which is expected to benefit from India’s push toward clean energy investment. The company’s strategic advantage lies in its ability to execute large-scale projects under the Tariff-Based Competitive Bidding (TBCB) framework, ensuring cost competitiveness while maintaining long-term revenue visibility.

With a strong balance sheet and a ₹57,561 crore order book, AESL is well-positioned to capitalize on future grid expansion initiatives, particularly as India scales up renewable energy integration and power distribution modernization efforts.

How Has AESL’s Stock Responded to the Latest Acquisition?

AESL’s stock has demonstrated a positive short-term trend, reflecting investor confidence in its expanding project pipeline. As of March 21, 2025, Adani Energy Solutions shares closed at ₹831.70 per share, marking a 2.04% increase from the previous session. Over the past month, the stock has climbed 6.19%, indicating a favorable market response to the company’s latest acquisition.

However, analysts remain cautious due to AESL’s high valuation metrics. The stock currently trades at 4.76 times its book value, with a price-to-earnings (PE) ratio of 277.63, significantly higher than industry peers. While AESL’s aggressive expansion strategy has contributed to strong revenue growth, concerns over corporate governance and ongoing investigations related to the Adani Group have prompted credit agencies like Fitch Ratings to assign a negative outlook to the company.

Despite these concerns, India’s broader energy market remains attractive to investors, particularly as the country accelerates renewable energy adoption and power sector reforms. Foreign institutional investors continue to see long-term potential in Adani Energy Solutions, given its dominant market share and ability to execute large-scale infrastructure projects.

For investors, the recommendation remains ‘Hold’, as the company’s strong order pipeline and growing transmission business provide significant upside potential, but governance risks and valuation concerns warrant close monitoring.

How Does This Project Fit Into India’s Energy Transition Goals?

India’s energy landscape is undergoing a fundamental shift, with renewable energy at the center of its decarbonization agenda. The government aims to achieve 500 GW of non-fossil fuel capacity by 2030, and Green Hydrogen is expected to play a key role in industrial decarbonization and energy security.

The Mundra transmission project is a critical enabler of this vision, ensuring that clean power can be efficiently transported to hydrogen production hubs, industrial zones, and export terminals. With states like Gujarat, Rajasthan, and Tamil Nadu emerging as key Green Hydrogen corridors, investments in transmission infrastructure are essential to achieving grid stability and cost-effective power delivery.

As global energy markets increasingly shift towards hydrogen-based solutions, India’s competitive advantage lies in its abundant renewable energy resources, cost-efficient production potential, and strategic location for exports. AESL’s latest project not only strengthens India’s hydrogen ambitions but also reinforces Adani Group’s commitment to building an integrated energy ecosystem spanning generation, transmission, and distribution.

AESL’s continued investments in grid expansion and smart energy solutions will be pivotal in supporting India’s transition to a low-carbon economy, ensuring that renewable power reaches industrial consumers efficiently and affordably.

A Major Step Forward for India’s Green Energy Infrastructure

AESL’s acquisition of the Mundra I Transmission Limited project represents a significant milestone in India’s renewable energy journey. By facilitating Green Hydrogen and Green Ammonia production, this project strengthens India’s position as a global leader in clean energy innovation.

As the company expands its transmission and distribution networks, its ability to execute large-scale, high-impact projects will be crucial to its long-term growth strategy. While investor sentiment remains cautiously optimistic, AESL’s success will ultimately depend on its execution efficiency, financial prudence, and ability to navigate regulatory challenges.

With India’s energy transition gaining momentum, projects like these will shape the future of sustainable energy infrastructure, setting the stage for a new era of clean power generation and distribution.