According to Reuters, India’s Adani Group, controlled by billionaire Gautam Adani, plans to spin off more businesses by 2028 and dismisses any debt concerns.
According to Jugeshinder Singh, the corporate house intends to spin off or demerge its metals, mining, data center, airports, roads, and logistics businesses.
“The criteria are for these businesses to achieve a basic investment profile and experienced management by 2025-28 when we intend to demerge them,” he explained.
Singh stated that the company is betting big on its airport business and hopes to make it the largest services base in the country outside of government services in the coming years.
In the last five and a half years, the Adani group has spun off its power, coal, transmission, and green energy businesses.
According to Forbes, Adani, the world’s third-richest man, has been diversifying his empire from ports to energy and now owns a media company.
According to Reuters, his flagship company, Adani Enterprises, plans to raise $2.5 billion in a follow-on share sale.
“We don’t go to market unless we are confident of raising the full amount ($2.5 billion),” Singh said, adding that the company wants to increase the participation of retail investors and is thus opting for a primary issue rather than a rights issue.
The funds will be used to fund green hydrogen projects, airport facilities, and Greenfield expressways, in addition to debt reduction, the company previously stated.
The group has traditionally incubated businesses within its flagship company, with the intention of demerger and listing them later. Its listed subsidiaries now operate in industries such as ports, power transmission, green energy, and food production.
Analysts have expressed concerns about the company’s debt accumulation, which Singh has dismissed.
In the fiscal year ending March 31, 2022, Adani Group’s total gross debt increased by 40% to 2.2 trillion rupees. CreditSights, a subsidiary of Fitch Group, described the Adani Group as “overleveraged” and expressed “concerns” about its debt in September 2022.
While some calculation errors were later corrected in the report, CreditSights stated that it remained concerned about leverage.
“Nobody has expressed any concerns about debt to us. No single investor has done so. I’ve spoken with thousands of high-net-worth individuals and 160 institutions, and no one has said anything like this, “Singh stated.
