Adani Group incubator lays foundation for new businesses

Adani Group's flagship, Adani Enterprises Ltd AEL, is also known as the incubator of the group, has laid the foundation for the next set of businesses that will be unlocked in the market.

These businesses are located in the areas of the green hydrogen ecosystem, airports, roads highways, data centres, and defence aerospace. The strategy is to nurture new businesses until they are self-sustaining and ripe for unlocking value in public markets. AEL is raising more than 20,000 crore via the equity follow-on route to support the new businesses.

Cash flow positive is already being generated by these new businesses. Jugeshinder Robbie Singh, CFO, Adani Group, says that our investment will earn a return over a period of time.

By 2027, the data center business will reach that stage, according to Singh.

The flagship AEL has churned out unicorns like Adani Transmission, Adani Power, Adani Ports, Adani Green, Adani Total Gas and Adani Wilmar over the years. The companies listed are enjoying very high valuations in the market.

Adani Group is placing bets on green hydrogen to replace traditional fuel sources. AEL incubated Adani New Energy Ltd ANIL, where strategic investor TotalEnergies took one-fourth of its equity stake.

ANIL has a strategy of playing the price game by developing the entire value chain. It covers the production of equipment for green value chains like solar cells, wind turbines, generators, electrolysers and fuel cells, as well as foraging into downstream products like green ammonia and green urea.

Adani started a company called AdaniConneX in the data space in February of last year. It wants to build 1 GW of data capacity over the next ten years. The first data center in Chennai has been commissioned by it, which has a capacity of 17 MW. Flipkart has already decided to set up its third data centre at Adani's Chennai facility. AdaniConnex is building hyperscale campuses in over half a dozen big cities.

Adani Airport Holdings Ltd AAHL, a part of the group, got into the airport business two years ago with a portfolio of six brownfield airports. This year, it completed the acquisition of two more airports - Mumbai airport and greenfield Navi Mumbai airport. The Mumbai Airport acquired by the GVK Group is India's second busiest airport by passenger and cargo traffic. AAHL is the country's largest airport operator with 25 per cent of passenger traffic and 40 per cent of air cargo.

In 2021-22 it handled 36.9 million passengers, 320,000 plus air traffic movements and 6.65 lakh MT cargo across seven operational airports. In terms of passenger and air traffic movement, we are almost 90 per cent of the pre-covid levels, says a company executive. The strategy is to give a final shape to its strategy of targeting non-aero revenues. The work at the greenfield Navi Mumbai airport is progressing well and is expected to open by the second half of 2024.

In October, Adani Defence Aerospace announced the acquisition of Air Works, India's largest and highly diversified independent MRO. Air Works is the oldest MRO in India with its presence in 27 cities and half a dozen maintenance bays.

Adani Road Transport Ltd ARTL is building national highways, expressways, tunnels, metro-rail, and railways. It has built an order book of 14 construction and operation contracts of over 5,000 lane km in a short period. The strategy is to grow organically and inorganically.