Group flagship Adani Enterprises will invest USD 21 billion ( INR 1.75 lakh crore) in its airport business over the next 10 years, group chief financial officer Jugeshinder Singh told ET.
The business is housed under wholly owned subsidiary Adani Airport Holdings, which currently owns seven operational airports, in Mumbai, Lucknow, Ahmedabad, Jaipur, Guwahati, Thiruvananthapuram and Mangalore. Phase I of city-side development across 98 acres at airports in Mumbai, Ahmedabad, Jaipur, Lucknow and Guwahati has begun.
“These are the five airports we are starting with, but city-side development will happen at all airports,” Singh said. Adani Airport is looking at growth in revenue from the non-aero segment emerging as a major contributor to the company’s revenue and operating profit. It intends to design the airport business with a hybrid revenue mix.
Adani Airport listing by 2028
The company is targeting non-aero business revenue at 75 per cent of overall revenue but did not specify a timeline for reaching that milestone. Currently, the ratio of aero to non-aero revenue stands at 75:25 at six airports, while for Mumbai airport, it is 50:50.
“The company intends to redefine India’s airport infrastructure sector through gateway development, regional footprint growth, focus on consumers and non-passengers, and a deeper investment in digital technology interventions,” said Adani Enterprises in its annual report for 2023-24.
This diversification of revenue streams, along with the government’s decision to popularise the public-private partnership model, and India’s anticipated emergence as the world’s third-largest aviation market, are expected to underpin growth at Adani Airport.
GMR Aerocity in New Delhi, in proximity to both the domestic and international airport terminals, offers a similar setup. The facilities there include food joints, retail brands, hotels and premium office spaces. It is modelled on the concept of a smart city.
Singh added that Adani Airport, which accounts for a fourth of the passenger traffic market share, is also building the Navi Mumbai International Airport, and expects to complete it by the end of this year, or early next year.
Karnataka infrastructure development minister MB Patil instructed officials to prepare a feasibility report for a second commercial airport in Bengaluru, considering the city’s future needs. Kempegowda International Airport (KIA) is currently the third-busiest airport in India.
Incubated businesses within Adani Enterprises are typically demerged once they mature, and the airports business, too, is set to be independently listed by 2028, said the CFO.
Capex this year
Adani Group will invest INR 1.3 lakh crore ( USD 15.6 billion) in FY25 across its businesses that include ports, power, new energy, materials and metals, transport and consumer, said Singh. About 85 per cent of these investments will go into green energy and airports.
At the group level, there is also a plan to raise USD 2-3 billion via equity in the current financial year, Singh said, adding that the group’s investments are powered by funds from operations and have limited third-party capital requirements.
Adani Group companies earned INR 82,000 crore in cash flows in FY24 and as much as 68 per cent of the funding will come from internal cash flows, said the finance chief.
Investment plans
Last week, Adani Group chairman Gautam Adani said the group plans to invest USD 100 billion in the next 10 years in energy transition and infrastructure. “Every investment target mentioned by the chairman is on track and every penny of investment is tied up,” Singh said.
The conglomerate has recorded 4.2 billion consumer interactions across businesses in a year. Margins are 30 per cent after deploying all the capital, while cash per share growth stands at 43.2 per cent , the Adani Group CFO said.
Meanwhile, he denied reports that the group plans to buy into payments firm Paytm but said it would “evaluate any opportunities” in the fintech space. Adani is also looking to invest about INR 2 lakh crore (about USD 24 billion) by 2030 to build 40 gigawatts more of renewable energy generation capacity. Currently, it has more than 10 GW of renewable energy capacity, comprising solar and wind energy.
“We plan to add 6-7 GW every year to reach 50 GW by 2030. Considering the ballpark number of INR 5 crore per megawatt, the investment could be in the range of INR 2 lakh crore by 2030,” said Sagar Adani, executive director at Adani Green Energy.
