Adani Power: Why PPA tie-ups matter to the company

# Adani Power: Why PPA tie-ups matter Adani Power Limited is increasingly locking its expanding generation capacity into long-term power purchase agreements. Around 95% of its operating capacity was tied up under PPAs by March 2026, reducing dependence on volatile merchant power prices. **What is changing:** Adani Power has been signing long-term agreements alongside its capacity expansion. In Q4 FY26, it secured a 1,600 MW PPA with Maharashtra DISCOM, while its expansion capacity tie-ups reached 13.3 GW during FY26. This matters because merchant power prices can fluctuate sharply with electricity demand, weather and renewable generation. A long-term PPA provides greater visibility over contracted volumes and tariffs. The trade-off is that contracted power may not capture the full upside when merchant prices rise sharply. In Q1 FY27, Adani Power's merchant and short-term realisation was ₹7.04/kWh, compared with ₹5.95/kWh for power sold under PPAs. The company is simultaneously expanding capacity toward 45 GW. Several projects are already under construction, including Mahan Phase-II, Raipur Phase-II and Raigarh Phase-II. **My view:** The interesting part of Adani Power's expansion is not simply the additional GW. It is how much of that capacity gets contracted and at what economics. Higher PPA coverage can make cash flows more predictable, but investors should also track whether contracted tariffs provide adequate returns on the capital invested. **What I'm watching:** PPA additions, tariff realisation, project commissioning, PLF, fuel costs and net debt. **Stance:** For Adani Power, the balance between contracted and merchant capacity will remain an important driver of earnings visibility and profitability. **Disclosure:** I am a SEBI Registered Research Analyst. Please refer to the applicable disclosures before taking any investment decision.