Adani Enterprises (AEL), which has interests in new energy, transport and consumer businesses, has significantly expanded its capital expenditure (capex) to more than ₹80,000 crore for this year and the next, as the flagship company of the Adani Group prepares to aggressively pursue after airport business and green hydrogen.
After the conclusion of FY24, AEL will embark on a capex cycle of about $49 billion for the ensuing five years, a top executive of the company said in a recent conference call. AEL executives had earlier shared a capex guidance of ₹68,000 crore till FY27 which was declared at the end of Q3-FY22. This included ₹34,000 crore for the Transport and Logistics vertical, ₹20,000 crore for Adani New Industries and ₹14,000 on airports business.
Robbie Singh, Chief Financial Officer, AEL, said, “Our capex for the next two years (FY23 and FY24) is approximately $5.1 billion and $5.3 billion. And, then from there onwards in the following five years, we would have a capex of approximately $49 billion.”
AEL which defines itself as an ‘incubator on establishing diverse new businesses’ has lined up capex of $2.6 billion for its airports business, about $1.3 billion in the Adani New Industries and $1.2 billion in for the road business, for this year. In the following year, Adani New Industries would see close to $2.7 billion, while the airport business will witness $1.6 billion. The road business will drop to about $1 billion, according to details shared by Singh.
“So progressively in the following five years (after FY24), Adani New Industries will be about $41 billion of the capex, airports being $4.3 out of the total $48 billion. So, majority of the capex will be in Adani New Industries,” Singh added.
Going green
Adani New Industries focusses on generation of green hydrogen, including downstream products, green electricity generation, manufacture of electrolyzers and wind turbines.
Capital expenditure for data centers is expected to be in the order of about ₹4200 crore or $600 million. From a capacity point of view, AEL’s target business plan is 300 MW.
5 broad verticals
AEL’s portfolio has five broad verticals. The energy and utility space comprises new industries like green hydrogen, data centre and water. The transport and logistics vertical comprises airports and roads. Consumer businesses have food FMCG and digital. Natural resources has a mining business and services business. Metal and manufacturing comprises specialised manufacturing and specialised products adjacent to energy business.
These plans will be funded on a project by project basis. Data centres have their own capital management plan as do airports and Adani New Industries.
“We recently announced the completion of the transaction for Mumbai airport. It has a coupon of 6.6% on the seven-year paper. The last three completions at Adani Airport Holding, for construction, we have used domestic banks debt, for ongoing funding we have used US private placement paper and for Adani Airport Holding to continue the capex program, we have used international banks,” Singh added.
AEL recently announced a primary equity transaction of ₹7,700 crore with International Holding Co and that forms the part of our ongoing equity programme to fund various development activities at AEL.