Airports, roads, ports and now 5G: Adani group's expansion rolls on

The Adani group's foray into the 5G space comes on the back of a massive expansion spree

The seven listed companies of the group have expanded across various infrastructure sectors — from airports and roads to ports. The flagship company, Adani Enterprises, is incubating new businesses like airports. Separately, the Adani family has won the bid to acquire Ambuja Cements for $10.5 billion.

Adani Enterprises is incubating airport, data centre, defence and aerospace, road, and metro and rail projects. In June, Kutch Copper, a subsidiary of Adani Enterprises, set up a greenfield copper refinery project to produce 1 MTPA (million tonnes per annum) in Mundra. The firm has achieved financial closure of ~6,071 crore for the first phase.

Among other listed companies, Adani Ports & SEZ runs a string of ports across India, while Adani Power is India’s largest private sector electricity producer. Another listed firm, Adani Green, plans to invest $70 billion by 2030 to become one of the world’s biggest renewable power companies. Recently listed Adani Wilmar is India’s biggest cooking oil producer, which sells its products under the Fortune brand.

Interestingly, low cost loans worth ~35,000 crore given to various listed Adani group companies by the promoter entities has helped them incubate long gestation projects such as roads, ports, airports and reduced finance costs in financial year 2021-22 (FY22). As part of its capital management strategy, the group plans to tap equity markets after commissioning its ongoing infrastructure projects and use the proceeds from the initial public offerings and the company’s own earnings to reduce debt.

The Adani group companies’ gross debt include ~21,000 crore of short-tenure debt, which is balanced against receivables from various government contracts. The group also has ~23,000 crore of long-term debt taken for various ongoing projects. The group companies reported total gross debt of ~2.2 trillion in FY22 and the promoter loans are like quasi equity with no repayment or service obligations, thus, reducing the finance costs of group companies.

Capitaline Code	Company Name	Mcap ( Rs Crore)	Price in Rs	Price Date	Bloomberg
70666	Adani Green	3,50,040	2,210	11-07-2022	ADANIGR IN
66273	Adani Transmissi	3,00,893	2,697	11-07-2022	ADANIT IN
39108	Adani Total Gas	2,98,505	2,714	11-07-2022	ATGL IN
4244	Adani Enterp.	2,70,357	2,372	11-07-2022	ADE IN
21281	Adani Ports	1,53,992	729	11-07-2022	ADSEZ IN
17808	Adani Power	1,09,903	285	11-07-2022	ADANI IN
20696	Adani Wilmar	80,223	617	11-07-2022	AWLTD IN
	Source Capitaline
	Compiled by BS Research Bureau

		Net Sales ( Rs Crore)			PBIDT ( Rs Crore)			Interest Cost ( Rs Crore)			PAT Cost ( Rs Crore)			Debt ( Rs Crore)			Interest Coverage Ratio ( X)
Capitaline Code	Company Name	FY21	FY22	chg YoY %	FY21	FY22	chg YoY %	FY21	FY22	chg YoY %	FY21	FY22	chg YoY %	FY21	FY22	chg YoY %	FY21	FY22
4244	Adani Enterp.	39,537	69,420	75.6	3,000	4,726	57.5	1,377	2,526	83.5	923	777	-15.8	16,227	41,604	156.4	2.2	1.9
20696	Adani Wilmar	37,090	54,214	46.2	1,430	1,909	33.5	407	541	33.0	729	804	10.3	3,051	2,701	-11.5	3.5	3.5
17808	Adani Power	26,221	27,711	5.7	10,597	13,789	30.1	5,106	4,095	-19.8	1,270	4,912	286.7	52,519	48,898	-6.9	2.1	3.4
21281	Adani Ports	12,550	15,934	27.0	10,655	10,821	1.6	2,255	2,541	12.6	4,994	4,728	-5.3	35,149	47,435	35.0	4.7	4.3
66273	Adani Transmissi	9,170	10,436	13.8	5,066	5,493	8.4	2,117	2,365	11.7	1,224	1,205	-1.6	27,095	29,902	10.4	2.4	2.3
70666	Adani Green	3,025	5,071	67.6	2,626	4,018	53.0	1,953	2,617	34.0	210	489	132.9	24,209	52,832	118.2	1.3	1.5
39108	Adani Total Gas	1,696	3,038	79.2	734	815	10.9	40	53	30.3	463	509	10.1	529	1,035	95.6	18.1	15.4
		1,29,289	1,85,823	43.7	34,107	41,570	21.9	13,256	14,737	11.2	9,812	13,423	36.8	1,58,779	2,24,408	41.3	2.6	2.8
	Source Capitaline
	Compiled by BS Research Bureau