AEL plans Rs. 50000 crore CAPEX in 5 Years, Focus on Strengthening Airports Business
CEOInsights Team, 0
"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," Jugeshinder said in a post-earnings conference call. He also stated that the company plans to invest a total capex of approximately Rs 35,780 crore for the airport business in the next five years.
"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," said Jugeshinder. The company had won bids for six airports at Ahmedabad, Mangaluru, Lucknow, Trivandrum, Jaipur and Guwahati. The company took over the operation, management and development of Mangaluru and Lucknow airports on October 31 and November 2, respectively while operations of Ahmedabad airport will be taken over this month.
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". In the roads sector, the company has signed five concession agreements with the NHAI under hybrid annuity model for construction of roads aggregating to over 200 kilometers. Two of the agreements were signed in July in Andhra Pradesh and Madhya Pradesh.
Adani Group Chairman Gautam Adani in a statement said "The ability to incubate, innovate and scale effectively and rapidly has been a defining philosophy of Adani Enterprises and we continue to learn and further improve this model”. He also stated that "The combination of our confidence in this business model, and our faith in India's
The Gautam Adani-led group plans to infuse Rs 35,780 crore in its airport business in the next five years
growth story is demonstrated through the investments we are continuing to make in additional infrastructure sectors that are critical to nation building".
Further, he said that the move into roads and water infrastructure, data centre parks, and airports, including the addition of the Mumbai International Airport and the Navi Mumbai International Airport, "provides us with a transformational platform that will help us create several strategic and growth-based adjacencies for our other businesses".
AEL has recorded a consolidated profit after tax (PAT) of Rs. 435.73 crore for the quarter ended September 30, 2020 as compared to a loss after tax of Rs. 10.06 crore in the said quarter last year. The company's consolidating total income stood at Rs. 9312.14 crore for Q2 of FY 2020-21, up from Rs. 8626.94 crore in the corresponding quarter last year. The company told stock exchanges that during the September quarter, the group had written-off one of its blocks in oil and natural gas exploration business for Rs. 129.73 crore due to commercial unviability of the project.
About the ongoing coal auction, Jugeshinder 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." The group has received a favorable order of the Supreme Court with respect to its price escalation claim in mining business. Pursuant to the order, Adani Group recognized cumulative income of Rs. 328.48 crore since fiscal 2013-14.
Among its other business, AEL's solar manufacturing volumes increased by 50 percent on YoY basis at 418 Mw during Q2 of FY'21 while its mining services production increased by 17 percent to 3.5 mmt on a YoY basis in the said period.
About 47 percent of the group's total debt of around Rs. 1.3 trillion has been shifted to global capital markets, apart from around 20 percent being with foreign banks and the rest with the domestic market, Singh reportedly said in the call. The move is believed to have allowed the group to shift the term of the loan from 3-5 years to more than seven years.