The prospects of turning profitable have become more challenging for Azure Power Global after US prosecutors indicted Gautam Adani and seven other senior business executives in connection with an alleged $250-million bribery scheme.

The Mauritius-based company, which is 53.4 per cent owned by Canadian pension fund CDPQ, with renewable energy assets in India, had set a high bar to become a low-cost renewable energy producer when it reached out to global investors including those in the US during its IPO.

“Our mission is to be the lowest cost power producer in the world,” Azure Power Global said in the prospectus to its stock flotation at the New York Stock Exchange (NYSE) in 2016.

The company's plan was to sell solar power in India on long-term fixed-price contracts at prices below prevailing alternatives.The initial going was steady, with the company surpassing 3GW (gigawatt) capacity in 2018. It also took great pride in its ability to float “Green Bonds at the lowest rates in India’s renewable industry.” The company had announced the issue of $414 million green bonds in 2021 with a coupon rate of 3.575 per cent.

But the story started to run a ragged course somewhere down the road.

As of March 31, 2024, the company's operational power plants, spread over 12 Indian states, generated 6,047 million units of green electricity, but losses mounted to $40.4 million. The company, which has a total reported debt of $1.34 billion as of March 31, 2024, also delisted from the NYSE last year for failing to file reports with the US SEC.

The path to becoming profitable, which was ignited following the 4GW manufacturing linked award secured from SECI and the execution of SECI's 2.3GW power purchase agreement with Andhra Pradesh in FY22, now seems distant amid an investigation by the US SEC.

Azure was charged of being forced to shoulder a third of the bribes paid to state-owned power utilities to entice them to sign PPAs for costly solar power. It was alleged that Azure ended up forfeiting a major chunk of its rights on solar power proceeds to Adani Green because of alleged machinations of the top brass at Adani Group.

“The end result of these manoeuvres was that Azure did not directly pay any money to Adani Green or the Adanis in satisfaction of Azure’s share of the bribe payments. Instead, Cabanes and Azure elected to meet part of Azure’s obligation by facilitating the indirect transfer of this lucrative corporate asset — the 2.3 GW PPA — to Adani Green and the Adanis, by first ceding it back to SECI under pretextual reasons,” the US SEC complaint filed in a separate suit against Cyril Sebastien Dominique Cabanes – the erstwhile director of Azure Power Global said.

Azure, for its part, said in a statement that it has co-operated with the US Department of Justice and US SEC and “will continue to do so” and that the directors referenced by the agency have been no longer associated with the company for over a year. The company has also said that it is not a defendant in either action from the two agencies.