Billionaire Gautam Adani's group plans to spin off businesses like hydrogen, airports and data centre between 2025 and 2028 after they achieve a certain investment profile, it's Chief Financial Officer Jugeshinder Singh said.
Adani Enterprises Ltd, which is looking to raise ₹20,000 crore in a follow-on share sale, is the business incubator for the group. Over the years, businesses such as ports, power and city gas were first incubated in AEL before being spun off or demerged into separate listed companies.
AEL currently houses new businesses such as hydrogen, where the group plans to invest USD 50 billion over the next 10 years across the value chain, flourishing airport operations, mining, data centre and roads and logistics.
"The businesses have to achieve a basic investment profile and maturity before being considered for a demerger. Between 2025 and 2028 we think these businesses can achieve the desired levels for a demerger," Singh told PTI.
The group is looking to become one of the lowest-cost producers of hydrogen -- a fuel of the future that has zero carbon footprint. It is also betting big on its airport business with an aim to become the largest service base in the country in the coming years, outside of government services.
Adani, 60, started as a trader and has been on a rapid diversification spree, expanding an empire centred on ports and coal mining to include airports, data centres and cement as well as green energy. He now owns a media company too.
Singh said the follow-on share sale is aimed at widening the shareholder base by bringing in more retail, high net-worth and institutional investors. This would also address concerns of liquidity by increasing the free float, he said, adding the company wants to increase the participation of retail investors and that is why it chose a primary issue instead of a rights issue.
AEL will use the money raised to fund green hydrogen projects, airport facilities and greenfield expressways, besides paring some of its debt. It will sell shares in a price band of ₹3,112 to ₹3,276 apiece in the follow-on public offer (FPO), slated to open on January 27 and close on January 31, according to the offer letter.
Of the ₹20,000 crore proceeds of the FPO, ₹10,869 crore will be used for green hydrogen projects, work at the existing airports and construction of a greenfield expressway. Another ₹4,165 crore will go towards repayment of debt taken by its airports, road and solar project subsidiaries.
AEL has been the vehicle for most of the new business expansion of Adani. Its current business portfolio includes a green hydrogen ecosystem, data centres, developing airports, developing roads, food FMCG, digital, mining, defence and industrial manufacturing, among others. As of September 30, 2022, it had ₹40,023.50 crore in borrowing.