Captains Speak     

Published: September 15, 2024
Updated: September 15, 2024

Adani Enterprises

Airport biz to be demerged: Navi Mumbai airport to be ready by FY2025

Ahmedabad-headquartered Adani Enterprises, the largest business incubator in terms of market capitalisation, is planning to demerge its airport business. At a conference call organised to discuss the performance of the company during Q1 of fiscal 2025, Vinay Prakash, director and CEO (natural resources management), indicated that this demerger may take place in 2027 or 2028.

In the Airports portfolio, for the first time ever, passenger movement at its airports crossed 90 million on a trailing 12-month basis. During the quarter, it added 39 new brands across all airports, of which about 25 brands were added in the recently inaugurated terminal of Lucknow Airport, which can now cater to 8 million passengers per annum. Additionally, it added 8 new routes, 6 new airlines and 13 new flights across all 7 operational airports during the quarter. The eagerly awaited greenfield Navi Mumbai project is on track for completion in FY25.

As regards the roads portfolio, he stated that during the quarter, it constructed 730 lane kilometres of roads, which is the highest for any quarter since its inception. The greenfield Ganga Expressway project is progressing as per schedule, and 3 out of 10 under-construction projects are now more than 80% complete, in line with the target schedule.

BIZ INCUBATOR

Maintaining that “Adani Enterprises continues to incubate new businesses and create sustainable and long-term value for its stakeholders,” Mr Prakash added, “Over the years, we have a track record of successfully incubating businesses which are currently leading companies in their respective sectors and delivering substantial returns to their shareholders. In line with this, the board of directors of Adani Enterprises has approved the demerger of the food FMCG business of Adani Enterprises to Adani Wilmar, along with its strategic investments in Adani Commodities LLP. The food FMCG business has become self-sustained, performing well and poised for future growth. With this, Adani Enterprises continues its journey to unlock value for its shareholders.”

Referring to the primary industry vertical, he said that in mining services, Adani Enterprises is the pioneer of the ‘mine development and operator’ concept in India with an integrated business model that spans developing mines as well as entire upstream and downstream activities. It provides a full-service range from seeking various approvals, land acquisition, rehabilitation and resettlement, developing required infrastructure and mining beneficiation, to tran

to designated consumption points. Its success is underpinned by its commitment to excellent risk management and sustainable mining practices. The company is MDO (mine developer and operator) for 8 coal blocks and 1 iron ore block. These projects are in the states of Chhattisgarh, Madhya Pradesh and Odisha.

According to Mr Prakash, during the quarter the company has delivered the quantities as per schedule. The production volume during the current quarter increased by 49% to 9.4 million tonnes and the despatch volume increased by 47% to 9.3 million tonnes. During the current quarter, revenue from mining services increased by 41% to Rs 856 crores and the EBITDA increased by 43% to Rs 347 crore.

I.R.M. LEADER

As regards the integrated resource management (IRM) business, he said the company continued to develop integrated resource management in terms of relationships with diversified customers across various end-user industries. “We remain the number one player in India and endeavour to maintain this leadership position,” he said. Over the past couple of years, the IRM business has been exploring ways to tap into new market segments through initiatives like a flagship e-portal for online trading of natural resources. By leveraging technology for faster and more reliable supplies, the portal has ensured ease of doing business for retail customers, leading to a larger marketshare for Adani Enterprises. IRM continues to target a balanced mix of customers through retail and public centre participation as end-customers. Volumes during the current quarter stood at 15.4 million tonnes. During the quarter, revenue from IRM stood at Rs 11,201 crore, while EBITDA was maintained at Rs 990 crore.

Referring to the commercial mining business, Mr Vinay Prakash revealed that the Carmichael (Australia) mine production increased by 21% to 3.2 million tonnes and the shipments increased by 16% to 2.8 million tonnes during the quarter. The company has 5 domestic commercial coal blocks and 2 domestic commercial bauxite mines which are in the project phase. These projects are in the states of Maharashtra, Chhattisgarh, Madhya Pradesh, Jharkhand and Odisha.

In its primary industry incubation portfolio in metals, the company’s copper unit under Kutch Copper situated at Mundra with a capacity of 500 ktpa has started its operations, and capacity is being steadily ramped up in a phased manner.