Adani commits ₹10,000-crore capex over seven years for airports business

Our Bureau Ahmedabad | Updated on August 08, 2019 Published on August 08, 2019

Adani has won the right to upgrade and operate airports in Ahmedabad, Lucknow, Jaipur, Guwahati, Thiruvananthapuram and Mangaluru (in pic)   -  H_S_MANJUNATH

To make payment of ₹1,600 cr for three airports by April 2020

Adani Enterprises Ltd (AEL) has committed an investment of ₹10,000 crore for its airports venture through its subsidiary, Adani Airports Ltd, to be made over seven years.

By April 2020, the company will take over three of the six airports it had won bids for, and make an upfront payment of approximately ₹1,600 crore, with an additional ₹2,000 crore to be made later.

“We have committed ₹10,000 crore over seven years for the airports business. We will make a total upfront payment of ₹3,600 crore for these six projects and we will undertake capex of ₹6,000 crore over seven years,” said Jugeshinder Singh, CFO, AEL, during a results con-call on Thursday.

The three airports projects will start generating revenues from April 2020. Of the six airports, AEL has been awarded three and is awaiting State approval for the other two, while for one airport — in Kerala — it is facing litigation from the State government.

Last year, the company had won the right to upgrade and operate airports in Thiruvananthapuram, Ahmedabad, Lucknow, Jaipur, Guwahati and Mangaluru for 50 years.

Revenue options

According to Singh, Adani will focus on non-passenger revenues, which it aims to tap from the city-side segment of the airport business. “Typically, at Ahmedabad airport, there are about 11.2 million passengers, but the non-passenger segment is three times more. Currently, its EBITDA is just about ₹95 crore. We expect it to be materially higher once we take it up. We expect to cater to another 30 million people,” he added. The airport business includes airport revenues, non-airport (land) revenues and city-side revenues, which caters to non-passengers.

AEL has also committed ₹7,000 crore for its coal and mining business in FY20.

Australia project

For the Carmichael mine project in Australia, AEL has so far invested about $1.1 billion including $856 million in the mine and $240 million in the rail project, which is 50 per cent owned by the Adani family, said Singh.

With progress on track, the Carmichael mine is expected to start producing by FY21. In the first phase, it will have a volume of approximately 11 million tonnes.

Published on August 08, 2019
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