Adani Group's energy units have delivered exceptional returns this quarter, with Adani Green Energy Ltd.'s shares rising nearly 70% and Adani Energy Solutions Ltd. and Adani Power Ltd. surging about 50% each. According to reports from The Economic Times, these gains have outpaced the BSE's power gauge, positioning Adani's energy stocks as among the few artificial intelligence trades available in India. The strong performance reflects investor confidence in the conglomerate's strategic positioning in India's growing AI infrastructure market. As Abhay Agarwal, founder of Piper Serica Advisors Pvt., noted, "Adani Group is a good proxy for playing AI infrastructure in India. India needs hundreds of gigawatts of data centers and the only group that is going all out is Adani."
The Adani Group has announced plans to invest $100 billion by 2035 to develop AI-ready data centers, positioning itself as a potential supplier for hyperscalers. As reported by The Economic Times, this ambitious investment strategy has made Adani a key player in India's AI infrastructure development. The conglomerate's focus on green-powered data centers aligns with global trends toward sustainable AI operations, while India's record electricity demand provides additional market support for these energy-intensive facilities. Deven Choksey, managing director at DRChoksey FinServ, emphasized that "The Adanis have started with complete renewable power to feed data centers, as against thermal power in the West. They are going to be the game-changers." The plan is designed to catalyze an additional $150 billion in investments across the broader ecosystem, creating a projected $250 billion AI industry in India by 2035.
India's data center market is experiencing unprecedented growth, with the market valued at approximately $10.32 billion in 2025 and projected to reach nearly $33.48 billion by 2035, expanding at a CAGR of 12.4% during the forecast period from 2026 to 2035. According to latest industry analysis, this growth is driven by rising cloud adoption, rapid growth in artificial intelligence workloads, government-backed digital transformation initiatives, and increasing regulatory emphasis on domestic data storage. Colocation data centers account for nearly 47% of market share in 2025, while hyperscale facilities are emerging as the fastest-growing segment. Major hubs including Mumbai, Chennai, Bengaluru, Hyderabad, and Delhi-NCR are emerging as strategic investment destinations for hyperscale campuses and next-generation colocation facilities.
Adani's data center expansion is centered on AdaniConneX Pvt., which has outlined plans to build 5 gigawatts of capacity by 2035. According to The Economic Times, the company is partnering with Alphabet Inc.'s Google for the US tech giant's $15 billion data center in India. Additionally, billionaire founder Gautam Adani is reportedly in talks with Meta Platforms Inc. and Walmart Inc.'s Flipkart for partnerships in this space. The company has recently announced plans to invest up to $5 billion in Google's AI-focused data center infrastructure project in Andhra Pradesh. The company's approach of using complete renewable power to feed data centers, as opposed to thermal power used in the West, positions it as a potential game-changer in the market. However, markets are beginning to price in the knock-on effects of the AI buildout, with India potentially following a path similar to China where power producers supplying data centers saw sharp reratings as the AI rally broadened.
India's data center power demand is projected to grow almost fivefold to 57 terawatt-hours by 2030, according to an S&P Global report cited by The Economic Times. This substantial growth trajectory supports the rationale behind Adani's massive investment in AI infrastructure. Nitin Chanduka, a strategist with Bloomberg Intelligence, noted that "With India lacking a strong semis/chip base, the AI bet is shifting to second-order plays like cheap, reliable power, fueling momentum in Adani's energy firms." The conglomerate's positioning as a world leader in green data storage, combined with its resources that form the backbone of AI operations, makes it an attractive proxy play for investors seeking exposure to India's AI infrastructure development. Industry experts are urging simple, non-negotiable rules requiring energy self-sufficiency for data centers above defined capacity thresholds, as the lights cannot afford to dim for a billion people while the tech cloud stays bright for the few.
According to BSE Ltd. data compiled by Bloomberg, as reported by The Economic Times, India's local institutional investors, including mutual funds, banks and insurance companies, increased their stakes in Adani's power-related stocks during the January-March quarter. The appeal of proxy plays like Adani is being driven by India's limited presence in pure-play AI, which risks driving more global money to markets such as Taiwan and South Korea. Market strategists note that with India lacking a strong semiconductor base, the AI investment is shifting to second-order plays like reliable power infrastructure, fueling momentum in Adani's energy firms. However, Adani Energy's valuation reflects significant execution risks, with the stock trading at a forward P/E of 74.66, assuming flawless execution of the decade-long infrastructure plan. The recent rally has pushed the price to around ₹1,407, leaving little room for error as the company manages operational headwinds including a 14.7% sequential decline in operating income in the first quarter.
