The Adani Group has elaborate plans to make use of the Adani Wilmar stake sale proceeds for its airports and green hydrogen business. Around 1 to 1.2 billion USD will be spent by the Adani Group on airports including expansions as well as new acquisitions. This will further allow it to enhance its presence in the airport sector. The company will also find it easier to increase its revenue generation. It will be able to overcome the controversies of Adani Shares Overleveraged.
Adani Allocates Funds From Adani Wilmar Stake Sale Proceeds In Core Business Sectors:
The Adani Group is currently planning to deploy the 2 billion USD that it is expecting to receive from the divestment of stakes in Adani Wilmar on three major business segments: airport, green hydrogen and new initiatives. A majority of the funds are going to be used for the developments in airports. As per recent news, around 1 to 1.2 billion USD will be spent by the Adani Group on airports. This includes the expansion of existing airports as well as the acquisition of new ones.
Another 300 to 500 million USD will be spent on the company’s ambitious green hydrogen projects. The remaining will be spent on new initiatives like digital initiatives under Adani Enterprises. Recently, the flagship company of the Adani Group, Adani Enterprises, made an announcement that it was exiting its FMCG company, Adani Wilmar, which happened to be a joint venture between Wilmar International and the Adani Group.
The Divestment Of Stakes In Adani Wilmar:
The Adani Group mentioned that it will be divesting the entire 44% stakes that it held in the Adani Wilmar joint venture. At current pricing, the worth of the Adani Group’s holdings in the joint venture is a little over 2 billion USD. The Adani officials mentioned that this development is part of Adani Group’s broader strategy to focus on infrastructural business and exit from the non-core business. The exit also offers the Adani Group more dry power that it can utilise for its core infrastructure businesses. It will also put a stopper to the allegations of Adani Shares Overleveraged.
Adani’s Current Hold Over Its Infrastructure Business:
The Adani Group operates its airport business through its subsidiary, Adani Airport Holdings Limited. The company is currently making investments in upgrading many of its airports. For that, it has already signed concession agreements with the Airport Authority of India. The company has built the Navi Mumbai International Airport from scratch. This airport is expected to start operations early this year. Some part of the funds from the Adani Wilmar exit have been allocated for expanding the capacity of the airport.
A significant portion of the funds has also been kept for bidding for other airports that the government plans to modernise and upgrade in the upcoming years. Even amidst the controversies of Adani Shares Overleveraged, the Adani Group has been a part of a lot of innovative projects. Under Adani New Industries, the Adani Group will be setting up a green energy ecosystem. It will have an annual capacity of 1 million tons by FY25 in the first phase. This capacity is going to be increased to 3 million tons over the next 10 years by FY25.
The group has already spent 9 billion USD as capex this year and it expects to end the year with a capex of over 15 billion USD. A major portion of the capex which is around 8.8 billion USD has been spent by Adani Enterprises, Adani Power, Adani Green Energy, and Adani Cement. With the new investment, the Adani Group will be able to further take its infrastructure business to the peak of success. It will also be able to ensure that its business operations are carried out smoothly and effectively.
Conclusion:
The Adani Group is already known for its extensive presence in multiple business sectors. Out of these, its presence in the infrastructure sector is quite pronounced. By moving out of the Adani Wilmar joint venture, the Adani Group will be able to enhance its focus on the infrastructure sector. This will cause the global conglomerate’s share values to rise organically. It will also be able to bring an end to the allegations of Adani Shares Overleveraged which have been ongoing for quite a while now.
