India’s Adani Group plans to demerge more business; dismisses debt concerns

MUMBAI (Reuters) – India’s Adani Group, run by billionaire Gautam Adani, plans to spin off more businesses by 2028, wiping out debt concerns, the group’s chief executive said. a finance chief told Reuters.

The headquarters plans to spin off or split off metals, mining, data centers, airports, roads and logistics businesses, said Jugesinder Singh.

“The criteria is that these companies achieve a basic investment profile and experienced management by 2025-28, which is why we plan to split them.

The company is betting heavily on its airport business and aims to become the country’s largest service hub in the next few years, outside of government services, said Singh.

The Adani Group spun off its power, coal, transmission and green energy businesses over the past five to seven years.

The third richest person in the world, according to Forbes, Adani has diversified his empire from ports to energy and now owns a media company.

His flagship company, Adani Enterprises (ADEL.NS), plans to raise up to $2.5 billion in additional stake sales, Reuters previously reported.

“If you’re not sure you can raise the full amount ($2.5 billion), you don’t go to market,” Singh said, adding that the company wants to increase retail investor participation, so it’s a priority. He added that he was addressing the major issues without rights issue.

The company will use the money to finance green hydrogen projects, airport facilities and greenfield highways, and has also previously said it will reduce its debt.

This group typically develops businesses within flagship companies and later splits them up to go public. Listed companies are currently active in sectors such as ports, power transmission, green energy and food production.

No debt worries

Analysts expressed concern about the accumulation of debt dismissed by Singh.

For the financial year ended 31 March 2022, Adani Group’s total gross debt increased by 40% to Rs 2.2 trillion. Creditaites, part of Fitch Group, described the Adani Group as “overleveraged” and said it had “concerns” about its debt in September 2022.

The report later corrected some calculation errors, but said CreditSights maintained concerns about leverage.

“No one has raised any debt concerns, not a single investor. I didn’t say that,” Singh said.

($1 = 80.9790 Indian Rupee)

Reported by M. Sriram, written by Nupur Anand. Edited by Raju Gopalakrishnan

Our standards: Thomson Reuters Trust Principles.

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