Adani Enterprises to spend Rs 50,000 crore on capex in 5 years; airport biz to get big chunk

Billionaire Gautam Adani-led Adani Enterprises Limited (AEL) plans to invest about Rs 50,000 crore in capital expenditure to boost its new businesses over the next five years, with a major chunk of it going towards airports business, a senior executive said on Wednesday.

The Adani Group's flagship company plans to invest Rs 35,780 crore in its airport business in the next five years, AEL Chief Financial Officer Jugeshinder Singh said.

"For Adani Enterprises for the next five years, the main focus area is airports, roads... the ballpark number over five years we expect... the capex is about Rs 50,000 crore," Singh said in a post-earnings conference call.

Out of the Rs 35,780 crore capex for the airport business, the company intends to spend Rs 14,249 crore on the Mumbai and Navi Mumbai airports and about Rs 15,000 crore on the other six under its control.

Also Read: Adani Enterprises Q2 results: Net profit at Rs 436 crore, revenue up 8%

Singh further stated that Adani Enterprises will consider a demerger of the airports business after 2023.

"With airports we want to make it a consumer transport facility as APSEZ (Adani Ports & Special Economic Zone) is a cargo transport facility. For that we have a clear strategy which Mr Adani has laid out for us," the CFO said.

The company has won the rights to run six major airports of the country - Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati - for 50 years. Of these, the company took over the operation, management and development of Lucknow and Mangaluru airports on October 31 and November 2, respectively, while operations of Ahmedabad airport will be taken over in the coming weeks. The company is expected to take control of Mumbai and Navi Mumbai airports in the next few months, and latest by March 2021.

About capex in road business, Singh said as a group point of view it is not very significant "but overall if we look at all in next five years it may be Rs 6,000 crore".

About ongoing coal auction, AEL CFO said: "We will continue to work with government''s programme so wherever it makes commercial sense for us we will be keen to participate... We are in a good position to exploit this opportunity."

For the July-September quarter of the current fiscal, Adani Enterprises reported a net consolidated profit of Rs 435.73 crore in the second quarter of FY21 as against a loss of Rs 10.06 crore in the corresponding period of last year. The turnaround in profit was mainly on account of lower cost of materials and better cost management including interest costs. Revenue from operations rose nearly 8 per cent in the September quarter at Rs 9,126.42 crore compared to Rs 8.464.19 crore in Q2 FY20.

By Chitranjan Kumar