Corporate Grapevine     

Published: June 15, 2024
Updated: June 15, 2024

Adani’s ambitious $100 bn capex spree

After the Tata group announced a $130 billion capex over the next 5 years, the Adani group has announced a $100 billion capex over the next decade with major outlays on energy transition projects and manufacturing capabilities for green energy components. The group has reported an EBITDA growth of 40% yoy in FY24 of $ 10 bn, and more than 80% of EBITDA came from infra-related businesses. The management also talked about a high Cash after Tax (FFO) to EBITDA ratio for the businesses, with FFO enough to envelop all debt maturities.

The group says its contracted EBITDA is 80% of the total group EBITDA and cash reserves stand at 20%+ of borrowings, helping address the group’s cash flow and system risks. What is interesting is that the group does not see a refinancing risk at the group level, and it says that effective capital management planning has been reflected in rate profile stability, with increasing duration, despite rate and forex volatility.

The group says that with its national footprint, it has been able to establish multiple touchpoints with Indian consumers and expects a demographic dividend to show up, with the consumer base on Adani’s core Infra platform already clocking 350 million users. The group will look to capitalise on this in the medium term.