Adani Group’s Massive ₹1.2 Lakh Crore Investment Strategy

Indian multinational conglomerate Adani Group plans to invest over ₹1.2 lakh crore across its portfolio companies, which includes airports, ports, energy, cement, media and commodities in the upcoming financial year starting April 1, as it doubles down on its $100 billion investment guidance over the next 7-10 years to grow businesses.

The projected capital expenditure for the financial year 2024-25 is 40% more than the portfolio estimated to have incurred in FY 2024. As per the analysts, the portfolio is estimated to have incurred a capex of approximately $10 billion in the financial year 2024, which ends on March 31. As per the reports, the estimated investments for the upcoming financial year will set the stage for exponential profit growth.

Adani Group is planning to allocate about 70% of this ₹1.2 lakh crore in the green energy business, including green hydrogen, renewable power and green evacuation. The remaining 30% will be used to expand its ports and airport businesses.

In February 2024, the Indian conglomerate released a media statement in which they stated that increasing cash flows from strong growth and robust credit profile has set the stage for unrivalled ‘Green Investment’.

Currently, Adani Group is the second largest solar power company in the world, it is the largest airport operator, with 25% of passenger traffic and 40% of air cargo. It is the largest integrated energy player, has the largest ports and logistics company with 30% of the national market share, and is the second-largest cement manufacturer in India.

Significant Investments in the Airport Portfolio

The new planned investments for the upcoming financial year come after the Group pledged to invest more than ₹60,000 crore in its airport business in the next 5-10 years.

The MD of Adani Ports and Special Economic Zone Ltd, Karan Adani, informed that the company plans to allocate half of the investments to terminal and runway capacity in the next 5 years, while the remaining half will be used for city-side airport development over 10 years.

He further added that in future, they anticipate that non-metro cities will offer direct global connectivity, bypassing traditional hubs. The domestic connectivity within these cities is expected to be enhanced.

By 2040, Adani Group is also expected to double its airport capacity, with an aim to capitalise on the increase in demands in the aviation market.

Speaking of the airport capacity, Karan Adani added that the current capacity of their airports is 110 million passengers annually (MPA). This will be increased by up to 3X. Lucknow has a new terminal. Navi Mumbai will open next, and Guwahati Airport will also get a new terminal. The company is in plans to get new terminals for Jaipur and Ahmedabad also. Overall, they are looking at a combined capacity of about 300 MPA by 2040.

On March 18, 2024, the share price of Adani Green Energy Ltd opened at ₹1,810.05, and Adani Ports & Special Economic Zone Ltd opened at ₹1,250.00.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.