Adani Enterprises' coal imports surge after government mandate, boosting profits and consumer electricity costs
Adani Enterprises secured the majority of coal import contracts issued by NTPC following a 2022 government order, leading to a sharp rise in its revenue and profit while raising power tariffs for Indian households.
The Union power ministry's 2022 directive that all thermal power plants import at least 10% of their coal needs came as international coal prices were climbing sharply. NTPC, the largest state-owned power producer, issued 31 tenders for 30.16 million tonnes of coal between December 2021 and April 2024; Adani Enterprises won 24 of these contracts and Adi Tradelink secured the remaining seven. Both firms were paid a fixed profit margin over prevailing coal and freight costs, meaning that each rise in global prices boosted their earnings per shipment.
As a result, Adani Enterprises' coal-import segment generated Rs 99,486 crore in revenue and Rs 3,417 crore in profit before tax for the 2022-23 fiscal year, roughly twice the previous year's figures. State governments and private generators had initially resisted the import mandate, warning of higher electricity bills, but the ministry allowed the added costs to be passed on to consumers. A year later the power minister confirmed that average power purchase costs had risen by 71 paise per unit, attributing the increase to a mix of factors including the higher coal import expenses.
Why it matters
The story shows how a government policy can drive corporate profit growth while increasing electricity costs for millions of Indians.
In this story
