Adani Group investment: Adani eyes $12.5 billion equity to partially fund Rs 5 lakh crore capex

“The average capex will be slightly above ₹1 lakh crore for five years,” said Jugeshinder Singh, group CFO of the Adani Group. “On average, we will raise $2.5 billion every year of equity over the next five years. The fundraising will happen either through rights issues or QIP (qualified institutional placement).”

The Adani Group raised $13.8 billion in equity between 2019 and 2024, among the highest such exercises by an Indian conglomerate after Reliance Industries. The money had been raised by Adani Enterprises, Adani Green Energy, Adani Energy Solutions and Adani Total Gas.

About 85% of the capital expenditure in the next five years will go toward utilities, which include green energy, power and power transmission, as well as airports and ports. The remaining 15% will be spent on metals, materials, copper and mining among others.

According to a February analyst presentation, the group’s core infrastructure portfolio continues to power cash flow generation, with an 84% contribution to the total portfolio ebitda. As of September 30, 2024, Adani had a cash balance of ₹53,024 crore, representing 20.5% of gross debt.

“By 2028-29, net debt to ebitda will be 3x, with annual cash flow rising to around ₹1.7 lakh crore,” he said.

Agencies

Domestic Banks’ Exposure to Rise
As some of the businesses come on stream, net debt is expected to start falling from 2028 to around 1.3 times by 2031. The group drew up a decade-long $100 billion capex plan last month. “Because our risk stance is such, we announce only what we can execute, run and fund ourselves,” he said.

The group projects $97-98 billion in post-tax cash flow over 10 years, nearly matching its $100 billion growth capex. This means it can fund planned projects entirely through internal cash flow, minimising risk. “Adani Group’s infra model delivers monopoly-like returns once assets are complete, with ongoing maintenance capex at just 5-6% of revenue compared to normally 30-40% seen in large capex heavy businesses like other infrastructure and manufacturing businesses,” Singh said.

As the group’s capex cycle shifts, domestic bank exposure will rise while that of overseas lenders will fall. “Typically, 40% of our banking is global capital and 40% is domestic, with the remaining 20% shifting based on project phases,” Singh said. “As we enter heavy capex, domestic exposure will rise to 50% as they’re more comfortable with diverse projects, while global banks focus on areas like energy transition. For projects like Adani Power or mining, domestic banks dominate.”

The Adani Group’s total debt was ₹2.58 lakh crore at the end of September last year. Of this, domestic banks accounted for 42% and global banks 27%, according to the analyst presentation.