Adani Group of India intends to demerge more businesses and dismisses debt concerns.
India’s Adani Group, which is run by billionaire Gautam Adani, wants to spin off more businesses by 2028. The group’s chief financial officer told Reuters that there are no worries about debt.
Jugeshinder Singh said that the company wants to separate its metals, mining, data centres, airports, roads, and logistics businesses. This is also called “spinning off” or “demerging.”
“The criteria is that these businesses must have a basic investment profile and experienced management by 2025–2028, which is when we plan to split them up,” he said.
Singh said that the company is putting a lot of money into its airport business and wants it to become, outside of government services, the largest service base in the country in the next few years.
In the last five to seven years, the Adani Group has split off its power, coal, transmission, and green energy businesses.
Forbes says that Adani is the third richest person in the world. He has been expanding his business from ports to energy, and he now owns a media company.
Reuters has said that his main company, Adani Enterprises, will sell more shares to raise up to $2.5 billion.
“We don’t go to the market if we aren’t sure we can raise the full amount of $2.5 billion,” Singh said. He also said that the company wants to get more small investors involved, so it is doing a primary issue instead of a rights issue.
The company said earlier that it would use the money to pay for green hydrogen projects, airport facilities, and Greenfield motorways, as well as to reduce its debt.
Usually, the group starts new businesses within its main company, then splits them off and lists them later. Its listed arms work in areas like ports, power transmission, green energy, and making food.
NO NEED TO BE CONCERNED ABOUT DEBT
Analysts have been concerned about the country’s growing debt, but Singh has put those fears to rest.
In the financial year that ended on March 31, 2022, Adani Group’s total gross debt went up by 40%, to 2.2 trillion rupees. CreditSights, which is part of the Fitch Group, called the Adani Group “overleveraged” and said it had “concerns” about its debt in September 2022.
Even though the report was updated to fix some math mistakes, CreditSights said it still had concerns about leverage.
“No one has told us to worry about debt. No investor has ever “I talk to thousands of wealthy people and 160 institutions, and no one has said this to me,” Singh said.
$1 equals 80.9790 Indian rupees