TotalEnergies Plans Strategic Exit from Adani Green Energy Stake Worth $1.14 Billion

French energy conglomerate TotalEnergies is preparing to execute a significant divestment by selling up to 6% of its stake in Adani Green Energy Limited (AGEL), marking a strategic shift in its renewable energy investment portfolio in India. This development, confirmed by multiple industry sources familiar with the transaction, represents one of the most substantial stake sales in India’s burgeoning renewable energy sector and signals a recalibration of international investment strategies in the country’s green energy landscape.

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Current Shareholding Structure and Investment Background

The French energy major currently maintains a substantial presence in Adani Group’s renewable energy arm, holding approximately 19% of the company through two distinct subsidiaries. The investment is structured through TotalEnergies Renewables Indian Ocean Ltd, which holds 15.58% of AGEL shares, and TotalEnergies Solar Wind Indian Ocean Ltd, which controls an additional 3.41% stake. This dual-subsidiary structure was established to optimize the investment framework and provide operational flexibility for the partnership.

The original investment, executed in January 2021, represented a landmark transaction in India’s renewable energy sector. TotalEnergies acquired a 20% minority stake in AGEL alongside 50% ownership in the company’s operating solar portfolio, which exceeded 2 gigawatts (GW) of capacity at the time. The transaction was valued at $2.5 billion, making it one of the largest foreign direct investments in India’s renewable energy industry and underscoring international confidence in the country’s green energy transition.

Substantial Returns on Investment

The potential divestment highlights the remarkable appreciation in AGEL’s valuation over the past four years. According to an industry executive with direct knowledge of the development, TotalEnergies’ original $2.5 billion investment has grown to an estimated value of nearly $8 billion, representing more than a threefold increase in just over three years. “TotalEnergies had bought its stake in AGEL in 2021 for around $2.5 billion, and it is now valued at nearly $8 billion. They now intend to take some profit off the table,” the executive stated, speaking on condition of anonymity due to the sensitive nature of ongoing negotiations.

Based on Adani Green Energy’s current market capitalization of ₹1.69 lakh crore (approximately $20 billion), the proposed 6% stake sale could potentially fetch TotalEnergies around ₹10,200 crore, equivalent to approximately $1.14 billion. This would represent a partial exit strategy that allows the French company to realize substantial gains while maintaining a significant 13% stake in AGEL, preserving its ongoing relationship with the Adani Group and its presence in India’s renewable energy market.

Industry analysts suggest that this profit-taking exercise reflects both the success of the original investment thesis and TotalEnergies’ need to rebalance its global portfolio amid changing market dynamics and corporate priorities. The timing of the potential sale coincides with AGEL’s continued strong performance and India’s accelerating renewable energy adoption, factors that contribute to maintaining attractive valuations for such transactions.

Strategic Rationale Behind the Divestment

The potential stake sale comes several months after TotalEnergies CEO Patrick Pouyanné publicly signaled the company’s intention to reduce its exposure to Adani Green Energy. Speaking to investors in September during an earnings call, Pouyanné acknowledged that while AGEL remained “a strong and growing company,” the French energy giant would not be expanding its green energy partnership with the Adani Group. “I would be very happy to sell my stake in Adani Green,” he stated candidly, indicating a clear strategic pivot away from further deepening the relationship.

This public statement marked a notable shift in TotalEnergies’ approach to its Indian renewable energy investments and raised questions about the future trajectory of the partnership. Industry observers have attributed this recalibration to multiple factors, including the French company’s broader strategic reassessment of its global renewable energy portfolio, concerns about concentration risk in emerging markets, and the need to optimize capital allocation across its diverse energy investments.

Sources familiar with the matter indicate that the 6% stake may be offered directly to Adani Green Energy itself, providing the Indian renewable energy company with an opportunity to increase its promoter holding and reduce foreign institutional ownership. AGEL management is expected to evaluate this proposal carefully, considering factors such as the impact on the company’s shareholding structure, available financial resources, and strategic implications of reducing TotalEnergies’ stake. However, neither Adani Green Energy nor TotalEnergies responded to email queries seeking official comment on the proposed transaction.

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Adani Green Energy: India’s Renewable Energy Powerhouse

Founded in 2015 as part of the diversified Adani Group conglomerate, Adani Green Energy has emerged as one of India’s largest and most ambitious renewable energy companies. The company currently boasts over 16.6 GW of operational renewable capacity, encompassing both solar and wind energy projects distributed across multiple Indian states. This substantial operational portfolio positions AGEL as a critical player in India’s ambitious target of achieving 500 GW of non-fossil fuel energy capacity by 2030, as outlined in the country’s commitments under the Paris Agreement.

AGEL’s growth trajectory has been particularly impressive, with the company setting aggressive expansion targets that align with India’s broader renewable energy goals. The company has publicly committed to reaching 50 GW of renewable energy capacity by 2030, an ambitious target that would require deploying approximately 3-4 GW of new capacity annually. This expansion strategy encompasses both greenfield project development and strategic acquisitions, supported by substantial capital investments and partnerships with international energy companies and financial institutions.

Perhaps the most remarkable project in AGEL’s portfolio is the Khavda Renewable Energy Park in Gujarat, which the company is developing on barren wasteland adjacent to the Pakistan border. This mega-project spans an area of 538 square kilometers—five times larger than Paris—making it the world’s largest renewable energy installation under development. The Khavda project exemplifies the scale of ambition that characterizes India’s renewable energy sector and AGEL’s position at the forefront of this transformation.

The site’s development involves overcoming significant logistical and environmental challenges, including extreme weather conditions, water scarcity, and the need to build extensive transmission infrastructure to evacuate power to demand centers. When fully operational, the Khavda project is expected to generate clean electricity sufficient to power millions of Indian homes, contributing substantially to the country’s decarbonization efforts and energy security objectives.

The TotalEnergies-Adani Partnership Evolution

Beyond the equity investment in AGEL, TotalEnergies and the Adani Group have cultivated a multifaceted energy partnership that extends across renewable and conventional energy sectors. In September of last year, the two companies formed a joint venture specifically focused on managing a portfolio of solar projects totaling 1,150 megawatts (MW) of capacity. Under the terms of this arrangement, TotalEnergies agreed to inject $444 million in capital to accelerate the development and commissioning of these projects, demonstrating continued commitment to certain aspects of the partnership even as the broader relationship evolved.

This joint venture structure allows both companies to leverage their respective strengths—TotalEnergies’ technical expertise, international experience, and financial capabilities combined with Adani’s deep understanding of the Indian market, regulatory environment, and project execution capabilities. The partnership model has enabled faster project development cycles and more efficient capital deployment compared to wholly-owned projects.

The relationship between TotalEnergies and Adani extends well beyond renewable energy into the conventional gas business, representing a more established and longstanding collaboration. Since 2018, the two companies have operated a joint venture in India’s gas distribution sector, with Adani Group and TotalEnergies each holding 37.4% stakes, while public shareholders own the remaining 25.2%. This platform encompasses diverse assets and operations including city gas distribution networks, liquefied natural gas (LNG) terminal infrastructure, and gas marketing activities.

The gas joint venture includes stakes in critical LNG import infrastructure at Dhamra in Odisha and potentially at Mundra in Gujarat, facilities that play vital roles in India’s energy supply chain. TotalEnergies contributes valuable LNG supply agreements and retail distribution expertise to this platform, complementing Adani’s infrastructure development and operational capabilities. This gas business has generally performed well and remains separate from the discussions surrounding the renewable energy stake sale, indicating that the relationship recalibration is specific to the green energy segment rather than representing a complete withdrawal from Adani partnerships.

Broader Context: TotalEnergies’ Global Portfolio Rebalancing

The proposed Adani Green stake sale should be understood within the broader context of TotalEnergies’ global strategic repositioning and financial management priorities. According to reports from Reuters, the French energy major is actively exploring the sale of several renewable energy assets across Asia as part of comprehensive efforts to reduce its debt burden and optimize its capital structure. This portfolio rationalization reflects the challenging market conditions facing European energy companies, including volatile commodity prices, energy transition costs, and pressure from investors to maintain financial discipline.

Last month, TotalEnergies announced plans to reduce its annual capital expenditure by $1 billion, bringing total spending down to a range of $15-17 billion per year between 2027 and 2030. This significant reduction is part of a broader $7.5 billion savings program designed to strengthen the company’s balance sheet, improve cash flow generation, and enhance returns to shareholders through dividends and share buybacks. The capital expenditure cuts will affect various segments of TotalEnergies’ operations, requiring careful prioritization of projects and investments across its global portfolio.

The decision to potentially divest from high-performing assets like Adani Green, despite their strong growth prospects, underscores the financial pressures facing integrated energy companies as they navigate the complex transition from fossil fuels to renewable energy. While renewable energy investments are strategically important for long-term sustainability and alignment with climate goals, they also require substantial upfront capital and generate returns over extended periods, creating tension with near-term financial objectives.

For TotalEnergies, the Adani Green stake sale represents an opportunity to crystallize substantial gains from a successful investment, redeploy capital to other priorities, and reduce exposure to emerging market concentration risk—all while maintaining a meaningful ongoing presence in one of the world’s fastest-growing renewable energy markets. This balanced approach reflects sophisticated portfolio management in an era of energy transition, where companies must simultaneously pursue decarbonization goals and financial sustainability.

Implications for India’s Renewable Energy Sector

The potential TotalEnergies stake sale carries significant implications for India’s renewable energy sector and its ability to attract sustained foreign investment. On one hand, the substantial returns generated by TotalEnergies’ investment—tripling in value over four years—demonstrates the strong growth potential and attractive returns available in India’s green energy market. This success story could encourage other international investors to explore opportunities in the sector, particularly as India continues to expand its renewable energy capacity and improve the regulatory environment for clean energy investments.

On the other hand, the decision by a major international energy company to partially exit its investment, despite strong performance, may raise questions about the long-term stability of such partnerships and the factors that influence foreign investors’ continued commitment to the Indian market. Observers will watch closely to see whether this represents an isolated case of portfolio rebalancing or signals broader concerns among international investors about governance issues, policy uncertainty, or other market factors.

For Adani Green Energy specifically, the potential reduction in TotalEnergies’ stake could have mixed implications. If AGEL itself acquires the stake, it would increase promoter holdings and potentially reduce concerns about foreign investor concentration. However, this would require deploying significant capital—approximately $1.14 billion—that could otherwise be used for project development and capacity expansion. Alternatively, if the stake is sold to other investors, it could broaden AGEL’s shareholder base and potentially increase trading liquidity, though it might also introduce new institutional investors with different investment horizons and priorities.

Conclusion

As negotiations around this potential transaction continue, the renewable energy industry will watch closely to see how this significant divestment unfolds and what it signals about international investment appetite in India’s clean energy transition. The outcome will likely influence perceptions of risk and return in emerging market renewable energy investments and may shape future partnership structures between international energy majors and Indian renewable energy companies.

Regardless of how the stake sale concludes, the TotalEnergies-Adani Green partnership has already demonstrated that substantial value creation is possible in India’s renewable energy sector, even as the nature of that partnership evolves to reflect changing corporate priorities and market conditions. The success of this investment, generating returns that exceed 200% in just over four years, provides a compelling case study for the commercial viability of large-scale renewable energy investments in India, potentially encouraging continued international capital flows into the sector despite the complexities of emerging market investments.

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By: Montel Kamau

Serrari Financial Analyst

24th November, 2025