AI trade turns Adani’s energy stocks into India proxy play

Adani Group’s push into green-powered data centers is driving gains in its energy units, which have become one of the few artificial intelligence trades in India.

The conglomerate’s plan to invest $100 billion by 2035 to develop AI-ready data centers is positioning it as a potential supplier for hyperscalers. That, alongside India’s record electricity demand, has lifted Adani Green Energy Ltd.’s shares nearly 70% this quarter, while Adani Energy Solutions Ltd. and Adani Power Ltd.’s surged about 50% each, outpacing the BSE’s power gauge.

“Adani Group is a good proxy for playing AI infrastructure in India,” said Abhay Agarwal, founder of Piper Serica Advisors Pvt. “India needs hundreds of gigawatts of data centers and the only group that is going all out is Adani.”


India’s limited presence in pure-play AI risks driving more global money to markets such as Taiwan and South Korea, which host leading chipmakers and hardware suppliers. That dynamic is boosting the appeal of proxy plays like Adani, which has pledged to be a world leader in green data storage and has resources that form the backbone of AI.

India’s local institutional investors, including mutual funds, banks and insurance companies, increased stakes in the group’s power-related stocks over the January-March quarter, according to BSE Ltd. data compiled by Bloomberg.

Adani’s data center push is centered on AdaniConneX Pvt., which has outlined plans to build 5 gigawatts of capacity by 2035. The company is partnering with Alphabet Inc.’s Google for the US tech giant’s $15 billion data center in India. Its billionaire founder Gautam Adani is also in talks with Meta Platforms Inc. and Walmart Inc.’s Flipkart for partnerships in this space.

“The Adanis have started with complete renewable power to feed data centers, as against thermal power in the West,” said Deven Choksey, managing director at DRChoksey FinServ. “They are going to be the game-changers.”

India’s data center power demand will grow almost fivefold to 57 terawatt-hours by 2030, according to an S&P Global report.

AdaniConneX is starting small compared with the mammoth data center capacity that hyperscalers such as OpenAI and Meta are building around the world. Still, the Indian conglomerate’s capacity could risk being underutilized as Amazon.com Inc., Microsoft Corp. and Google have yet to make big commitments to third-party capacity in India.

Meanwhile, markets are beginning to price in the knock-on effects of the AI buildout, from rising power demand to grid investment and physical infrastructure. India may follow a path similar to China, where power producers supplying data centers saw sharp reratings as the AI rally broadened.

“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,” said Nitin Chanduka, a strategist with Bloomberg Intelligence.