Adani Group to spin off hydrogen, airport, and data centre businesses by 2028

Billionaire Gautam Adani’s group intends to spin off businesses like hydrogen, airports, and data centres between 2025 and 2028 once they reach a specific investment profile, the company’s Chief Financial Officer Jugeshinder Singh said.

The group's business incubator is Adani Enterprises Ltd, which aims to raise Rs 20,000 crore through a follow-on share sale. Businesses like ports, power, and city gas were initially nurtured by AEL over the years before being spun off or demerged into distinct listed companies.

The group plans to invest USD 50 billion over the next 10 years across the value chain in hydrogen, which is currently housed by AEL. The airport operations, mining, data centres, roads, and logistics are also thriving.

“The businesses have to achieve a basic investment profile and maturity before being considered for a demerger. Between 2025 and 2028 we think these businesses can achieve the desired levels for a demerger,” Singh told PTI.

The company aims to become one of the most affordable producers of hydrogen, a fuel with no carbon footprint that will be used in the future. To surpass government services in the coming years as the largest service base in the nation, it is also placing significant bets on its airport business.

Adani, 60, began his career as a trader before embarking on a rapid diversification drive that saw him expand his empire, which was centred on ports and coal mining, to include data centres, cement, airports, and green energy. He now also owns a media business.

The follow-on share sale, according to Singh, aims to increase the number of institutional, retail, and high-net-worth investors to increase the shareholder base.

He added that the company wants to increase the participation of retail investors, which is why it chose a primary issue over a rights issue. This would also address concerns about liquidity by increasing the free float, he said.

In addition to paying down some of its debt, AEL will use the funds raised to finance green hydrogen projects, airport facilities, and greenfield motorways.

According to the offer letter, it will sell shares in the follow-on public offer (FPO), which will begin on January 27 and end on January 31, in a price range of Rs 3,112 to Rs 3,276 per share.

Rs 10,869 crore out of the Rs 20,000 crore in FPO proceeds will be used for green hydrogen projects, airport maintenance, and the building of a greenfield motorway. Another Rs 4,165 crores will be used to pay off debt incurred by its subsidiaries' road, solar, and airport projects.

The majority of Adani's new business expansion has been carried out through AEL.

In addition to others, its current business portfolio includes a green hydrogen ecosystem, data centres, developing roads, airports, food FMCG, digital, mining, and industrial manufacturing.

It had debt totalling Rs 40,023.50 crore as of September 30, 2022.

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