Adani Enterprises (AEL), the flagship company of the Adani Group, has revised its capital expenditure (capex) guidance downwards for FY24 and will now invest $3.8 billion across three business areas, down from $5.3 billion — a 28% drop from its earlier guidance.
This is the first material correction in AEL’s investment plans after the group was hit by US-based short-seller Hindenburg Research responsible for wiping out more than $100 billion of market capitalisation of Adani companies.
Last year, in an analyst call after a quarterly result announcement, Jugeshinder Singh, Adani group CFO, had guided for $5.3 billion capex for FY24 and $5.1 billion for FY23. The capex plan for five years starting FY25 was announced to be $49 billion.
“Due to the market’s dislocation in relation to that made-up short-seller report, we just wanted to focus on the committed capex for the 12-month period, which means our capex ramp-up will be slightly higher in 2028-2030,” Singh said in an analyst call after the Q4FY23 results.
Adani’s transportation vertical comprising airports and roads business, will see a capex of $2.1 billion for the year. The data centre business and new industries like utilities business will see an investment of $800 million, while the materials business vertical will witness a capex of $1 billion, Singh added.
Adani Airports Holdings (AAHL) has maintained its guidance about the opening of Phase 1 of the Navi Mumbai International Airport. Singh said the airport is on course to start operations in the last quarter of 2024.
According to a separate presentation made by AAHL, the greenfield airport, which is slated to have two operational runways simultaneously, will commence operations in December 2024. The Navi Mumbai airport will have a peak capacity of 90 million passengers per annum.
The airport business makes up the bulk of AEL’s debt. At ₹14,461 crore, up 107% year-on-year, the airport business segment comprised 42% of the long-term gross debt of AEL, as of March 31. AEL’s total gross debt, however, stood reduced to ₹38,320 crore by the end of FY23, down 7% compared to ₹41,024 in FY22, going by the disclosures made by the company.
“Airports business is in its very early stage of ramp-up. We have a backlog of 17 airlines wanting to come to Mumbai,” Singh added. AAHL has seven operational airports under its fold including Mumbai International Airport and airports in Ahmedabad, Jaipur and Lucknow.
AEL further added its green hydrogen business plans remains afoot with a capex ramp-up plan starting from FY25 and FY26. The company classifies itself as an incubator with interests in areas like energy, airports, mining, roads, data centre, food FMCG and digital.