Adani Power Limited
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Briefing
Adani Power Limited — the brief
Forensic posture: Serious flags. The auditor flagged a high-severity loan default at a subsidiary (Korba Power) plus 7 other issues ranging from property records gaps to disabled audit trails; related-party dealings total ₹35,000 crore with SEBI scrutiny over unreported transactions; contingent liabilities of ₹1,546 crore (3.3% of net worth) are dominated by a ₹964 crore customs dispute; earnings quality is solid (score 73) and bankruptcy risk is low, but governance and disclosure gaps create material friction.
Auditor’s report (CARO 2020)
Auditor’s assessment Serious flags. Auditor: S R B C & CO LLP. Opinion: Unqualified. Fiscal year FY24-25. 1 critical, 4 material, 3 minor flags.
- Statutory dues compliance: The holding company delayed depositing certain undisputed tax and statutory obligations to authorities.
- Repayment default: Korba Power Limited (acquired subsidiary) has defaulted on a term loan repayment to National Housing Bank.
- Audit trail feature disabled: Two subsidiaries' accounting software do not have audit trail enabled for all privileged database changes, creating a control gap.
- Audit trail feature disabled: Moxie Power Generation Limited's accounting software lacks audit trail for privileged database access.
Related-party transactions
Assessment Concerning. Disclosed volume of ₹35,000 Cr across 60 related parties. Fiscal year FY24-25.
- Large Loans Given to Subsidiaries at ₹9,215 Cr: Adani Power Limited disbursed ₹9,215.44 crore in loans to subsidiaries during FY25, with peak outstanding reaching ₹9,021 crore, representing very large intragroup capital deployment; the loans are interest-bearing per the AR but the scale
- Sales to Adani Enterprises ₹6,756 Cr and Powerpulse ₹2,217 Cr: The company sold goods worth ₹6,755.75 crore to Adani Enterprises Limited and ₹2,216.64 crore to Powerpulse Trading Solutions Limited (both KMP/promoter-associated entities), totalling over ₹8,972 crore or approximately 18% of standalone re
- ₹1,891 Cr Services Paid to KMP-Controlled Entities: Adani Power paid ₹800.91 crore to Adani Ports & SEZ and ₹651.06 crore to Adani Infrastructure Management Services (totalling ₹1,890.89 crore) for port handling and repairs & maintenance services to KMP/promoter-controlled group entities, wh
- ₹3,057 Cr Unsecured Perpetual Securities Held by Group Entities: KMP/promoter-controlled entities Adani Infra (India) Limited (₹2,943.47 crore) and Adani Properties Private Limited (₹113.45 crore) hold ₹3,056.92 crore of unsecured perpetual securities issued by the company, representing a significant qua
Contingent liabilities
Assessment Concerning. Total disclosed: ₹1,546 Cr (3.3% of net worth). Fiscal year FY24-25.
- Custom duty demand March 2012 to February 2013, ₹19.26 Cr paid under protest
- Interest on custom duty July 2015 to February 2016 at Supreme Court
- Custom duty demand FY2009-10 to FY2014-15 at Development Commissioner Mundra
“The Group has not been provided with or has not itself obtained sufficient appropriate audit evidence to support the completeness assertion of property, plant and equipment held in the name of the Company with respect to certain properties of Udupi Thermal Power Plant.”
What retail misses·The Korba Power default is buried in CARO Annexure disclosures and the SEBI Show Cause Notices on related-party reporting are disclosed in contingent liabilities footnotes — neither appears in mainstream news headlines, yet both signal governance friction and potential regulatory liability that affect the group's credit standing.
Strengths noted in disclosures: Altman Z-score of 4.85 places the company in the 'safe' zone with low bankruptcy risk, supported by profitability and asset productivity. · Earnings quality composite score of 73 (good) shows cash flow aligns with reported profit and low earnings manipulation risk; Novymarx signals above-average profitability. · Unqualified audit opinion from S R B C & CO LLP despite flagging issues — no qualification of financial statements themselves.
Forensic signal
From the company's own filingsStrong: 52-Week · Size · Weak: Yield