Adani group to invest $150 billion

At an investor meeting hosted by Ventura Securities Ltd. in New Delhi on October 10, Adani Group Chief Financial Officer Jugeshinder “Robbie” Singh discussed the group’s growth strategies. The group, which began as a trader in 1988, quickly expanded into ports, airports, roads, power, renewable energy, power transmission, gas distribution, and FMCG, and more recently into data centres, airports, petrochemicals, cement, and media.

Over the next five to ten years, the group intends to invest between US$50 to US$70 billion in green hydrogen industry and another US$23 billion in green energy, according to him. It will spend $7 billion on electricity transmission, $12 billion on transportation infrastructure, and $5 billion on roads.

In conjunction with Edge ConneX, it would invest USD 6.5 billion in data centres with cloud services, and another USD 9–10 billion is planned for airports, where it is already the largest private operator. It invested USD 10 billion in its entry into the cement industry with the purchase of ACC and Ambuja cement.

He stated that the company is entering the petrochemical industry and has plans to invest USD 2 billion in a 1 million tonnes per year PVC manufacturing facility as well as USD 1 billion in a 0.5 million tonnes per year copper smelter.

A total of USD 7–10 billion will be invested in the healthcare sector, including money from the Adani Foundation. This investment will go toward insurance, hospitals, diagnostic centres, and pharmaceutical companies.

Singh claimed that the Adani Group has started developing its infrastructure and logistics portfolio so that it may not only become the biggest player in India but one of the top five worldwide.

“Look at Adani Ports, Adani Transmission, Adani Entire Gas, and Adani Power. These businesses are in total infra and utility portfolio was established by four key portfolios,” he added of the four companies. “Of all infrastructure portfolios of comparable size, it is the one with the fastest growth. Mining and materials are our main vertical industries, and they are located near to our infrastructure’s core.”

He explained the reasoning behind the expansions by stating that the Adani Group’s involvement in the port industry made sense for a trading company. And because energy is essential for this, the venture into distributed energy and lastly into gas to offer a comprehensive logistics and infrastructure portfolio.

Given that logistics and warehousing are essential to the cement industry, the current entry into metals and mining is an extension of this.

Adani group

According to Singh, the firm earns USD 8 billion in profits before interest, tax, depreciation, and amortization (EBITDA). About USD 3.6 billion of this is used to pay off debt (interest and principal). Businesses spend USD 1.8 billion on capex while paying USD 700 million in taxes.

He added that over the past nine years, the Group’s EBITDA has expanded 23 percent CAGR, while debt has grown by 12 percent, even if the Group’s debt has increased in absolute terms.

Singh claimed that the group’s business incubator is its flagship company, Adani Enterprises. This company served as an incubator for the ports, power, transmission, and gas industries. When those industries reached a certain level of maturity, they were spun off into separate companies and listed on stock exchanges.

The similar strategy will be used for a number of new businesses, including airports that are being developed under AEL. They’ll be split up until they’re self-sufficient and able to pay for their own capital plans, he said.

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