Between March 2024 and January 2026, a remarkable pattern emerged in India's power sector. The Adani Group secured all eight long-term coal power tenders issued by BJP-ruled states, while winning only one of four comparable tenders from opposition-ruled states. This wasn't coincidence—it was the result of tender conditions specifically designed to favor vertically integrated players.
The numbers tell a compelling story. These contracts could generate an estimated Rs 13.27 lakh crore over 25 years, representing a transformative financial opportunity for the group. But how did this happen, and what does it mean for India's power sector?
Maharashtra's tender design was particularly innovative—and controversial. The state required bidders to supply both thermal power (1,600 MW) and solar power (5,000 MW) from a single entity. This "twin-source criterion" was unprecedented in the Indian energy sector.
The requirement effectively excluded specialized players. Pure thermal companies without renewable capacity couldn't participate. Pure renewable players without thermal capacity were also sidelined. Only companies with significant scale in both technologies could compete—which meant essentially Adani Group, given its position as India's largest private thermal power producer through Adani Power Limited and largest renewable player through Adani Green Energy.
Competitors complained that this design would "immensely increase development and delay risk and discourage participation". Only four companies participated, compared to the typical 10-15 bidders in standard tenders. Adani Group won with a bid of Rs 4.08 per unit, beating JSW Energy's Rs 4.36 per unit.
Rajasthan's approach was even more blatant. The state initially floated a bundled 11,200 MW tender combining solar and thermal capacity, modeled on Maharashtra's design. When prospective bidders pressed to separate the two sources for better competition, the state scrapped that tender and issued an exclusive 3,200 MW thermal tender instead.
The new tender included a location mandate requiring the entire capacity to be based within Rajasthan—giving Adani Group a distinct advantage given its ongoing 3,200 MW expansion at the Kawai plant. The commissioning timeline was set at 42-60 months, compared to 36 months in model guidelines, aligning perfectly with Adani Power's existing equipment contracts with BHEL.
The Rajasthan Electricity Regulatory Commission flagged "data gaps" in the state's justification for the project, noting that the Central Electricity Authority had slashed the state's thermal requirement forecast by 3,750 MW. Despite these concerns, the state proceeded without mandatory regulatory approval.
Assam took a different approach—extraordinary concessions. The state committed to purchasing excess electricity from Adani Group's 3,200 MW plant, even though the Central Electricity Authority's Resource Adequacy Plan showed Assam needed only 2,829 MW of additional coal power by 2035-36.
The Assam government pledged state funds to compensate for losses from surplus power. The tender also waived standard requirements for land and forest clearances, with the state government handling these for Adani Group. Despite the plant being located far from coal sources, an empowered committee granted special exemption for guaranteed coal supply under union government policy.
Bihar offered perhaps the most extraordinary concession—leasing 1,000 acres to Adani Group for a thermal power plant at "Re 1 per year". This nominal lease rate dramatically reduces the group's capital expenditure requirements, improving project economics compared to market-based transactions.
These concessions from BJP-ruled states significantly improve the risk-return profile of Adani Group's investments. The guaranteed revenue streams and reduced upfront costs create a moat around the group's power business that competitors cannot easily replicate.
The Rs 13.27 lakh crore revenue estimate is based on several key assumptions: 75% plant load factor, static tariffs, and no inflation adjustments. These assumptions are highly conservative—the actual revenue could be 50-90% higher when accounting for inflation escalations and tariff revisions.
For Adani Power, this revenue stream transforms the financial picture. The company currently has total borrowings of Rs 42,830 crores and a debt-to-equity ratio of 0.77x. With the new PPAs, the company's operating cash flow of Rs 20,514 crores could potentially double over the next few years. The debt service coverage ratio, currently at 6.72x, could improve to 5-6x. The guaranteed revenue stream also strengthens the credit profile. Adani Power's credit rating has already been upgraded 8 notches over 6 years to AA status. With 95% of its 18.15 GW capacity tied up under long-term PPAs, the company has exceptional revenue visibility. This should support further rating upgrades and reduce the cost of capital relative to peers without such long-term contracts.
The Madhya Pradesh tender demonstrated another advantage—the greenshoe option. Adani Power won the initial 800 MW at Rs 5.838/kWh. When the state exercised the greenshoe option for an additional 800 MW, it was first offered to Hindustan Thermalprojects, which refused it, then to Torrent Power, which also rejected it. Only then was it offered to Adani Power, which accepted.
This incremental 800 MW at the original winning tariff provides additional annual revenue of approximately Rs 3,068 crores without competitive bidding risk. The total 1,600 MW project represents an investment of Rs 21,000 crores, with revenue-to-investment ratio of 29.2% annually.
This dominance didn't emerge in a vacuum. The Union government's 2024 policy reversal to resume long-term coal power contracts created the enabling environment. In August 2024, the government announced it would add 80 GW of thermal capacity by 2031-32, a jump of 36.8% over existing thermal capacity.
The Central Electricity Authority's demand projections provided legitimacy for state-level tenders, while the Ministry of Coal's assured supply commitments under the SHAKTI policy reduced fuel risk. The Central Electricity Regulatory Commission's tariff approval process validated the competitiveness of discovered tariffs, providing regulatory credibility to the process. The policy shift reversed the decline in long-term thermal contracts during Modi's first and second terms, which had been driven by three factors: economic growth projections that didn't match reality, climate commitments, and falling solar prices. The 2024 reversal recognized that thermal power remains essential for energy security until energy storage becomes viable.
Adani Group's competitive advantages are multifaceted. Scale is fundamental—with 18,150 MW of operational capacity, the group is India's largest private thermal power producer. Vertical integration between thermal and renewable segments creates synergies that competitors cannot match.
Technology leadership matters too. Adani was the first in India to commission 660 MW supercritical units, enhancing efficiency and reducing emissions. The group's robust supply chain and in-house coal logistics provide significant cost advantages in fuel sourcing. Financial strength is equally important. The group's improved credit rating to AA status and strong brand equity facilitate capital access. Long-term PPAs with state electricity boards provide predictable revenue streams, crucial for financial stability.
The concentration of 16.7 GW of thermal power capacity additions in the hands of a few private players raises concerns about long-term competition. Adani Group's share of these additions is significant, potentially creating an oligopolistic structure in the private thermal power market.
This concentration could reduce competitive pressure on tariffs over time. The Supreme Court's 2014 coal scam ruling emphasized that the government should ensure maximum competition to arrive at the best possible prices. Tender designs that restrict competition may face legal challenges.
Researchers from energy sector think tank Prayas warned that bundled tenders "effectively exclude many players from the bidding process". The renewable energy sector has lower entry barriers and has seen substantial price reductions through competition—benefits that bundled tenders may undermine.
The 25-year contract period brings its own risks. Policy changes, renewable energy cost declines, or climate commitments could reduce the attractiveness of coal power over time. Maharashtra's 2,500 MW Round-the-Clock PPA requiring 51% "traceable green energy" will test the group's renewable integration strategy.
For now, though, Adani Group's "undisputed pole position" in the coal power sector positions it to capitalize on the Union government's revised target of 95 GW additional thermal capacity. The group's strategy of expanding existing plants rather than developing greenfield projects improves capital efficiency and time-to-market.
The Rs 13.27 lakh crore opportunity represents a transformative moment for Adani Group—but also raises important questions about competition, consumer costs, and the long-term structure of India's power sector.
