Adani Power Stock Split: A Sweet Deal or Stock Market Trap?

A stock split is a good mechanism to reward shareholders. It is beneficial for shareholders as it increases the number of shares they hold while proportionally reducing the price per share. However, a stock split does not change the overall value of their investment or their ownership stake in the company.

This means shareholders end up with more shares that are more affordable and accessible, which can make it easier for them to buy and sell their shares.

Recently, a top power company announced a stock split. The stock in the action is Adani Power.

Here's all you need to know about the stock split from the company:

• The Adani Power board on 1 August 2025 announced a stock split.
• Adani Power's board has approved a stock split in the ratio of 1:5. This means each existing equity share with a face value of Rs 10 will be subdivided into 5 equity shares of Rs 2 face value each.
• This will be the company's first-ever stock split.
• The record date for the proposed subdivision or stock split will be determined once the company receives approval from the shareholders.

So, is this Adani Power Stock Split a Sweet Deal for Shareholders?

The thing you must note is that after the ex-stock split date, the stock will get adjusted. Meaning, the share price tends to fall based on the ratio of the stock split declared. Let's explain this with an example for better clarity.

Say company A has announced a stock split in a 2-for-1 ratio. An investor after the ex-stock split date who owns 1 share priced at Rs 100 will end up with 2 shares priced at Rs 50 each.

In short, you get more shares, but the market price reduces in proportion to the stock split.

The total value remains Rs 100, so the intrinsic value of the investment and your ownership as a shareholder (as a percentage) in the company remains unchanged. The company's overall market capitalisation also stays the same because the increase in the number of shares is offset by the decrease in price per share.

So, is the stock split a sweet deal for shareholders?

The immediate financial benefit comes more from enhanced market dynamics - better liquidity and potentially favourable price movement - rather than any fundamental value change.

In the long term, returns would come from fundamental performance and not the stock split.

A Look at the Financials of Adani Power

Along with the stock split, the board also declared Q1 FY26 results.

The consolidated total revenue of Adani Power for Q1 FY26 dropped to Rs 141.67 billion (bn) vs Rs 150.52 bn in Q1 FY25. The fall is largely due to lower merchant tariff realisation and import coal prices year-on-year.

The consolidated EBITDA for Q1 FY26 is also lower at Rs 57.44 bn vs Rs 62.90 bn for Q1 FY25. This is mainly due to lower revenue and additional operating expenses of recent acquisitions year-on-year.

The consolidated net profit after tax for Q1 FY26 is now at Rs 33.05 bn vs Rs 39.13 bn for Q1 FY25. This 15% drop is on account of lower merchant tariffs and elevated operating expenses following acquisitions.

According to the company, power demand was affected by an early monsoon in Q1 FY26, in comparison to the demand surge witnessed in Q1 FY25 due to a heat wave phenomenon. As a result, all India energy demand came down by (-) 1.6% to 445.2 BU in Q1 FY26 compared to 452.4 BU in Q1 FY25.

After the Q1 FY26 results and stock split announcement, shares of Adani Power fell as much as 2%.

Adani Power Financial Snapshot (FY21-25)

(Rs m, consolidated)	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025
Net Sales	262,215	277,112	387,733	503,513	562,031
Net Profit	12,700	49,116	107,266	208,288	127,496
Return on Equity (%)	9.7	26.3	35.9	48.3	22.6
Return on Capital Employed (%)	13.9	18.9	17.3	34.7	23.5

Source: Equitymaster

What Next for Adani Power?

Adani Power has an ambitious expansion plan targeting a power generation capacity expansion from its current approximately 17.55 GW to about 30.67 GW by 2030. This will be primarily driven by a large-scale investment program with a capital expenditure of around Rs 1,200 bn over the next 6 years.

In July 2025, Adani Power completed the acquisition of Vidarbha Industries Power, a company with a 2x300 MW coal-fired power plant in Maharashtra.

In May 2025, Adani Power won a tightly contested bid to supply 1500 MW (net) of thermal power to Uttar Pradesh. As part of the contract, the company will supply power at a highly competitive tariff of Rs 5.383 per unit from a greenfield 2x800 MW (1500 MW net) ultra-supercritical power plant, which will be set up under the design, build, finance, own, and operate model in the state.

Adani Power aims to self-finance its expansions largely through internal accruals, supported by robust earnings.

Adani Power's future looks growth-oriented with a strategic emphasis on aggressive capacity expansion through advanced thermal power projects, substantial investments funded internally, and integration within the Adani Group's broader infrastructure and renewable energy vision.

About Adani Power

Adani Power is a leading power producer in India with a large thermal power footprint, significant growth track record, an expanding renewable portfolio, and a strategic focus on efficient generation technologies. It is part of the larger diversified Adani Group.

Adani Power focuses on deploying high-efficiency, low-emission ultra-supercritical thermal technologies and expanding its base-load power generation through a mix of brownfield and greenfield projects. They also support India's energy security ambitions with a balanced portfolio and investments in renewable projects.

To know more, check the Adani Power factsheet and latest quarterly results.

You can also compare Adani Power with peers on our website:

Adani Power vs Tata Power

Adani Power vs CESC

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Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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