Five new Adani Group companies to hit the IPO market
Adani Group’s flagship, Adani Enterprises Ltd (AEL) is known as the incubator of the group & has laid the foundation for the next set of businesses which will be unlocked in the market in near future.
These businesses operate in the areas of green hydrogen ecosystem, airports, roads & highways, data centres, and defence & aerospace. Adani Enterprises has strategy to nurture new businesses until they are self-sustaining and ripe for unlocking value in public markets. Earlier, such strategy is effectively seen at Adani Ports & SEZ ltd, Adani Total Gas, Adani Power and Adani Transmission & more recently Adani Wilmar ltd. These listed companies are enjoying very high valuations in the market. In fact, AEL is raising Rs 20,000 crore via the equity follow-on route to support the new businesses.
“These new businesses are already cash flow positive. Our investment will earn a return over a certain period of time when these businesses reach a certain scale,” says Jugeshinder Singh, CFO, Adani Group.
“Airport business will reach that stage by 2025. Hydrogen will hit that mark in 2026-27. Roads will be there by 2024-25. Data center business will reach that stage by 2027–28,” adds Singh.
Adani New Energy Ltd:
Adani Group is now placing its bets on green hydrogen to replace traditional fuel sources. AEL has incubated Adani New Energy Ltd (ANIL) where strategic investor Total Energies has taken one-fourth of its equity stake.
ANIL has a clear strategy of playing the price game by developing the entire value chain. It covers the manufacturing of equipment for green value chains like solar cells, wind turbines, generators, electrolyzes, and fuel cells to the production of green hydrogen and also foraging into downstream products like green ammonia and green urea.
Adani started another company called AdaniConneX in the data space in February of last year. AdaniConnex is building hyperscale campuses in over half a dozen big cities. Its goal is to build 1 GW of data capacity over the next ten years. It has already commissioned the first data center of 17MW at Chennai. Flipkart has already decided to set up its third data centre at Adani’s Chennai facility.
Adani Road Transport Ltd (ARTL)
Another new business, Adani Road Transport Ltd (ARTL), is building national highways, expressways, tunnels, metro-rail, and railways. In a short period, it has built an order book of 14 construction and operation contracts of over 5,000 lane km. The strategy is to grow both organically and inorganically.
Adani Airport Holdings Ltd
Adani Airport Holdings Ltd (AAHL), which is part of the group, got into the airport business two years ago with a portfolio of six brownfield airports. This year, it completed the acquisition of two more airports –Mumbai airport and greenfield Navi Mumbai airport. The Mumbai Airport acquired from the GVK Group is India’s second busiest airport by both passenger and cargo traffic. AAHL is already the largest airport operator in the country with 25 per cent of passenger traffic and 40 per cent of air cargo.
In 2021-22, it handled 36.9 million passengers, 320,000 plus air traffic movements, and 6.65 lakh MT cargo across seven operational airports. “We are nearly 90 per cent of the pre-covid levels in terms of passenger and air traffic movement,” says a company executive. The company is giving final shape to its strategy of targeting non-aero revenues. The work at the greenfield Navi Mumbai airport is progressing well and is expected to open by the second half of 2024.
Adani Defence & Aerospace
Recently in October 2022, Adani Defence & Aerospace announced acquisition of Air Works, India’s biggest and highly diversified independent MRO. Air Works is the oldest MRO in India with a presence across 27 cities and half a dozen maintenance bays.