Adani Group Plans $12.5 Billion Equity Raise for ₹5 Lakh Crore Capex
The Adani Group has announced plans to raise over $12.5 billion in equity over the next five years to support its ambitious ₹5 lakh crore (approximately $57.16 billion) capital expenditure program. This strategic move aims to bolster the conglomerate’s investments in utilities and infrastructure projects across India.
Strategic Equity Fundraising
According to the Group’s Chief Financial Officer, the company intends to secure an average of $2.5 billion annually through equity fundraising mechanisms such as rights issues or qualified institutional placements (QIPs). This approach is designed to maintain a balanced and sustainable capital structure while fueling the group’s expansive growth plans.
Focus on Utilities and Infrastructure
A significant portion of the planned capital expenditure—approximately 85%—is earmarked for the utilities sector. This includes substantial investments in green energy initiatives, power generation, power transmission, as well as the development and expansion of airports and ports. The remaining 15% is allocated to sectors such as metals, materials, copper, and mining, reflecting the group’s diversified investment strategy.
Historical Context and Financial Health
Between 2019 and 2024, the Adani Group successfully raised $13.8 billion in equity, marking one of the largest fundraising efforts by an Indian conglomerate, second only to Reliance Industries. These funds were channeled through key entities, including Adani Enterprises, Adani Green Energy, Adani Energy Solutions, and Adani Total Gas. As of September 30, 2024, the group reported a cash balance of ₹53,024 crore, accounting for 20.5% of its gross debt, underscoring its robust financial position.
Projected Financial Outlook
The group anticipates that by the fiscal year 2028-29, its net debt to EBITDA ratio will stabilize at 3x, with annual cash flows projected to reach around ₹1.7 lakh crore. As various business ventures become operational, the net debt is expected to decrease to approximately 1.3 times by 2031. This projection aligns with the group’s decade-long $100 billion capex plan, reflecting a strategic vision for sustained growth and financial stability.
Diversified Funding Sources
The Adani Group’s funding strategy involves a mix of domestic and international financing. Historically, domestic banks have contributed 42% of the group’s total debt, while global banks have accounted for 27%. As the group embarks on this extensive capex cycle, it anticipates an increase in domestic bank exposure to 50%, reflecting a strategic shift to leverage local financial institutions’ familiarity with diverse projects.
In summary, the Adani Group’s plan to raise $12.5 billion in equity over the next five years underscores its commitment to enhancing India’s utilities and infrastructure sectors. This substantial investment is poised to drive economic growth, create employment opportunities, and reinforce the group’s position as a leading conglomerate in the nation’s industrial landscape.
