In a strategic report released by Jefferies, Adani Energy Solutions, formerly known as Adani Transmission, emerges as the primary beneficiary of a revolutionary power distribution reform expected in 2024. The report anticipates the revival of the Electricity Distribution Act post the May 2024 elections, aiming to foster privatization in the power distribution sector.
This reform aims to enhance private participation in distribution, aiming to improve the financial health of distribution companies. State Electricity Boards (SEBs) are expected to eventually raise tariffs for the heavily subsidized agriculture sector, reducing losses. Private distribution companies, including Adani Energy Solutions, are expected to provide power at rates lower than SEBs, promoting a shift toward increased private sector involvement in distribution.
Jefferies analysts express confidence in Adani Energy Solutions, stating, “Adani Transmission is the biggest beneficiary of the same.” The renaming of Adani Transmission to Adani Energy Solutions in July 2023 further reinforces its pivotal role in the evolving power sector.
In the broader power industry, Jefferies recommends NTPC, JSW Energy, and Power Grid as top picks. The analysts foresee a significant upswing in power generation, transmission, and distribution (T&D) investments, projecting a rise to $280 billion over FY24E-30E.
As India endeavors to revitalize the power sector following a decade of underinvestment, 2024 is poised to witness accelerated capacity addition, higher merchant prices, and increased orders for power T&D equipment.
