Adani plans to invest $14B in FY25 across sectors: Sources

Adani Group plans to invest more than Rs 1.2 lakh crore (about $14 billion) across its portfolio companies that range from ports to energy, airports, commodities, cement and media in the fiscal year starting April 1, as it doubles down on its $100 billion investment guidance over the next 7-10 years to grow businesses, sources said.

The projected capital expenditure or capex for the 2024-25 (April 2024 to March 2025) fiscal is 40% higher than what the portfolio is estimated to have incurred in FY24.

According to analysts, the portfolio is estimated to have incurred a capex of around $10 billion in FY24 which ends on March 31.

Sources said these investments will set the stage for exponential profit growth.

The group had previously guided a $100 billion capex over the next 7-10 years. Most of this investment is going to go into group fast-growing businesses—renewable, green hydrogen and airports.

As much as 70% of the planned capex will go into its green portfolio—primarily renewable power, green hydrogen, green evacuation. Of the remaining 30%, the majority will be spent towards airports and ports businesses, they said.

In calendar year 2023, the portfolio delivered a $9.5 billion EBITDA (up 34.4% year-on-year), while its net debt has reduced by 4% from March 2023 to September 2023 (balance sheet figures are only declared half yearly).

In the December quarter, Adani's portfolio reported record EBITDA growth of 63.6%, taking its 12-month EBITDA to an all-time high of $9.5 billion (Rs 78,823 crore) in 2023.

Increasing cash flows from fast-growing profits have set the stage for mega-scale investments, sources said.

Its net debt to EBITDA at the end of September was 2.5X, which is expected to decline by the end of FY24, sources said.

In a media statement released in February, the group said increasing cash flows from strong growth and robust credit profile has set the stage for unrivalled 'Green Investment'.

A school drop-out, group chairman Gautam Adani started out as a commodities trader and rose to become Asia's richest person with an empire spanning across ports, power generation, airports, mining, renewables, gas, data centres, media and cement.

Today, Adani Group is the world's second-largest solar power company, it is the largest airport operator with 255 of passenger traffic and 40% of air cargo, the largest ports and logistics company with 30% of the national market share, the largest integrated energy player, and the country's second-largest cement manufacturer.

India's largest infrastructure conglomerate with showcase projects like Navi Mumbai Airport, Ganga Expressway, the world's largest renewable park at Khavda in Gujarat and Mundra Port has committed a $100 billion investment over the next 7-10 years. This investment will play a pivotal role in transforming India's energy and transportation landscape.

Sources said with a strong emphasis on green energy transition, it will be allocating more than 70% of this $100 billion to its green businesses including renewable power, green hydrogen, and green evacuation transmission lines.

The conglomerate is building the world's largest renewable park at Khavda, Gujarat, spanning over 530 square kilometres—an area five times the size of the city of Paris.

A large portion of total investments is earmarked for expansion and development of its fast-growing airports business and ports business, they said.

With a portfolio boasting eight airports including the upcoming Navi Mumbai airport and 14 domestic ports, Adani wants to further solidify its presence in these sectors.