By 2028, Adani Group plans to sell out businesses in data centers, hydrogen, and airports: CFO Jugeshinder Singh
By 2028, Adani Group plans to sell out businesses in data centers, hydrogen, and airports: CFO Jugeshinder Singh
According to Chief Financial Officer Jugeshinder Singh, billionaire Gautam Adani’s organization strives to sell out industries including hydrogen, airports, and data centers between 2025 and 2028 once they meet certain investment criteria. The group’s business incubator is Adani Enterprises Ltd, which plans to sell further shares to generate Rs 20,000 crore. Enterprises including ports, power, and city gas were first developed within AEL over time before being sold off or demerged into several publicly traded corporations.
The group plans to invest USD 50 billion over the next 10 years in the supply chain of hydrogen, which is currently housed by AEL. Airport operations, mining, data centers, roads, and logistics are also flourishing. To even consider a demerger, the companies must have reached maturity and established a stable investment profile. According to Singh’s estimations, the target dates for these businesses to meet the requirements for a demerger are between 2025 and 2028.
The company’s long-term goal is to make hydrogen, a carbon-free fuel of the future, readily available at competitive prices to the general public. In order to surpass government programs in the next few years as the largest service base in the nation, it is also placing significant bets on its airport business.
Adani, now 60 years old, started out as a trader and quickly diversified to expand his business. Adani’s affiliation with Prime Minister Narendra Modi, which has also sparked accusations of favoritism, has been a main driver of this growth. Adani has received a large number of energy and infrastructure agreements from the government. His company is involved in all stages of the coal business cycle, from mining to power generation to distribution.
They manage airports and ports. They are constructing enormous solar farms. Adani’s companies are several of the biggest, if not the biggest, stakeholders in each of these industries which were centered on ports and coal mining, encompassing data centers, cement, airports, and green energy. Putting the contracts aside, Adani’s rise has also been propelled by enormous sums of taxpayer money invested and borrowed.
He currently also owns a media business. With an initial authorized and compensated share capital of Rs 1,00,000 per share, it had created a wholly-owned subsidiary named AMG Media Networks which will endeavor to continue media-related activities such as publishing, advertising, broadcasting, and distributing information through various media networks, among other things.
Gautam Adani, India’s richest man, is offering discounts of 10%-15% to investors in India’s largest follow-on share sale thanks to his innovative new business model. Offers accepted will be subject to a 50% down payment and the balance paid in one or two installments. A discount of 64 rupees per share would be given to ordinary shareholders.
Singh claims that the secondary share offering is made with the intention of attracting a larger pool of organizational, sales, and high-net-worth shareholders. Raising the free float would help solve financial concerns, he added, stressing that the firm preferred a central issue over a rights issue because it wants to boost the participation of ordinary investors.
Along with paying down some of its debt, AEL will use the funds collected to finance green hydrogen projects, airport infrastructure, and greenfield motorways. The follow-on public offer (FPO), scheduled to begin on January 27 and end on January 31, will sell shares in a price range of Rs 3,112 to Rs 3,276 per share.
10,869 crore of the 20,000 crore rupees in FPO profits will be used for green hydrogen projects, airport maintenance, and the building of a greenfield motorway. Subsidiary road, solar, and airport initiatives have racked up debt totaling Rs. 4,165 cr.
AEL has served as the primary vehicle for Adani’s growth in its business portfolio. He said that his companies support India’s goals of changing from “Atmanirbhar Bharat” to “Bharat par Nirbhar,” or “World depends on India” (self-reliant). In addition to others, its present business portfolio comprises a green hydrogen ecosystem, data centers, developing roads, airports, food FMCG, digital, mining, and industrial manufacturing.
On the 30th of September, 2022, its debt stood at Rs 40,023.50 crore. During the 2022 financial year, the Adani Group racked up nearly $20 billion in total loans. Loans from state-owned banks, including Bank of Baroda and Punjab National Bank, made up 21% of the total, down from 55% in 2015–16.
The State Bank of India was responsible for $2.3 billion in loans, or nearly 40% of the total amount loaned by public sector banks. The percentage of loans from private banks dropped from 31% to 11% between 2015 and 2016. Adani’s equity capital program and the company’s other financial commitments make up the total amount owed.
Despite the fact that the Adani Group has received fewer loans from public banks overall over time, worries about the banks’ financial statements still exist. And since March 2022, India had one of the maximum “bad debt” ratios, which measures the extent to which loan repayments have been defaulted on, of any equivalent country at 5.9%.
Analysts claim that convenient borrowing to allies, who frequently operate enterprises that are not sufficiently financially secure, is a contributing factor in the problem of bad loans. “Banks have been preferring Adani despite concerns about [the Adani Group] being undercapitalized,” stated KS Legal & Associates managing partner Sonam Chandwani.
edited and proofread by nikita sharma
