Adani Enterprises plans Rs 50,000 crore capex in 5 yrs; focus on airports

At least Rs 35,000 crore would be for the airport business and the rest on roads, data centres and other ventures.

Adani Group's flagship company Adani Enterprises Limited (AEL) has drawn a capital expenditure plan of around Rs 50,000 crore for the next five years, aiming to boost its airports, roads, data centre and other businesses. 

Bulk of the planned capex would go behind AEL's airports business where it has not only taken over three of the six airports it bid for but also acquired Mumbai and Navi Mumbai airports. In a post earnings call on Wednesday, AEL chief financial officer Jugeshinder Singh reportedly said that roughly Rs 35,000 crore worth of capex would go behind the airport business over the next five years. 

The rest of the capex would go for AEL's other businesses, including roads and data centre, among others. The company does not plan to demerge its airport business before end of 2022.

AEL has recorded a consolidated profit after tax (PAT) of Rs 435.73 crore for the quarter ended September 30, 2020 as compared to a loss after tax of Rs 10.06 crore in the said quarter last year. The company's consolidating total income stood at Rs 9312.14 crore for Q2 of FY 2020-21, up from Rs 8626.94 crore in the corresponding quarter last year.

The company told stock exchanges that during the September quarter, the group had written-off one of its blocks in oil and natural gas exploration business for Rs 129.73 crore due to commercial unviability of the project.

Also, the group has received a favourable order of the Supreme Court with respect to its price escalation claim in mining business. Pursuant to the order, Adani Group recognised cumulative income of Rs 328.48 crore since fiscal 2013-14.

Among its other business, AEL's solar manufacturing volumes increased by 50 per cent on YoY basis at 418 Mw during Q2 of FY'21 while its mining services production increased by 17 per cent to 3.5 mmt on a YoY basis in the said period.

About 47 per cent of the group's total debt of around Rs 1.3 trillion has been shifted to global capital markets, apart from around 20 per cent being with foreign banks and the rest with the domestic market, Singh reportedly said in the call. The move is believed to have allowed the group to shift the term of the loan from 3-5 years to more than seven years. 

Commenting on the results, Adani Group chairman Gautam Adani said that AEL's move into roads and water infrastructure, data center parks, and airports including the addition of the Mumbai International Airport and the Navi Mumbai International Airport has provided the group with a "transformational platform" that will help them create "several strategic and growth based adjacencies" for other businesses.