Adani Group Announces $14 Billion Investment Plan for FY25
During the December quarter, Adani’s portfolio witnessed an unprecedented 63.6% growth in EBITDA, culminating in a 12-month EBITDA peak of USD 9.5 billion (Rs 78,823 crore) in 2023.
The Adani Group intends to allocate over Rs 1.2 lakh crore (equivalent to approximately USD 14 billion) across its diverse portfolio of companies, spanning from ports to energy, airports, commodities, cement, and media, in the fiscal year commencing on April 1. This move reflects the company’s commitment to amplify its investments and aligns with its ambitious goal of achieving a USD 100 billion investment target within the next 7-10 years, aiming to expand its business ventures.
The anticipated capital expenditure (capex) for the fiscal year 2024-25 (spanning from April 2024 to March 2025) is expected to be 40% greater than the estimated expenditure incurred by the portfolio in FY24.
Analysts suggest that the portfolio’s capital expenditure (capex) in FY24, concluding on March 31, is estimated to be approximately USD 10 billion.
According to sources, these investments are poised to lay the foundation for exponential growth in profits.
Previously, the group had outlined a plan for a USD 100 billion capital expenditure (capex) spread over the next 7-10 years. A significant portion of this investment will be directed towards the group’s rapidly expanding businesses, particularly in the areas of renewables, green hydrogen, and airports.
Around 70% of the planned capital expenditure (capex) will be allocated to the group’s green portfolio, focusing primarily on renewable power, green hydrogen, and green evacuation. The majority of the remaining 30% will be directed towards the group’s airport and port businesses, according to sources.
In the calendar year 2023, the portfolio achieved a USD 9.5 billion EBITDA, marking a 34.4% year-on-year increase, while its net debt decreased by 4% from March 2023 to September 2023. It’s worth noting that balance sheet figures are disclosed only semi-annually.
During the December quarter, Adani’s portfolio achieved a remarkable EBITDA growth of 63.6%, propelling its 12-month EBITDA to a historic high of USD 9.5 billion (Rs 78,823 crore) in 2023.
Sources indicate that the surge in cash flows resulting from rapid profit growth has paved the way for large-scale investments.
According to sources, the net debt to EBITDA ratio stood at 2.5x as of the end of September, with expectations for a decrease by the conclusion of FY24.
In a media statement issued in February, the group highlighted that the upsurge in cash flows resulting from robust growth and a strong credit profile has created an unparalleled opportunity for “Green Investment.”
Commencing as a school drop-out, Gautam Adani, the chairman of the group, embarked on his journey as a commodities trader. Over time, he ascended to the position of Asia’s wealthiest individual, overseeing a vast empire that encompasses ports, power generation, airports, mining, renewables, gas, data centers, media, and cement.
Presently, the Adani Group holds the distinction of being the world’s second-largest solar power company. Additionally, it leads as the largest airport operator, managing 25% of passenger traffic and 40% of air cargo. Moreover, it stands as the premier ports and logistics company, commanding a 30% share of the national market. Furthermore, it is the foremost integrated energy player and ranks as the country’s second-largest cement manufacturer.
As the largest infrastructure conglomerate in India, the Adani Group boasts of flagship projects such as the Navi Mumbai Airport, Ganga Expressway, the world’s largest renewable park at Khavda in Gujarat, and Mundra Port. With a commitment of USD 100 billion over the upcoming 7-10 years, this investment is poised to be instrumental in reshaping India’s energy and transportation infrastructure.
According to sources, with a significant focus on transitioning to green energy, more than 70% of the USD 100 billion investment will be directed towards the group’s green ventures, encompassing renewable power, green hydrogen, and green evacuation transmission lines.
The conglomerate is in the process of constructing the world’s largest renewable park in Khavda, Gujarat, which extends over 530 square kilometers—an expanse five times larger than that of the city of Paris.
A significant portion of the overall investments is designated for the expansion and advancement of its rapidly expanding airports and ports businesses, as indicated by sources.
With a portfolio that includes eight airports, including the forthcoming Navi Mumbai airport, and 14 domestic ports, Adani aims to strengthen its position in these industries even further.
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