Ahmedabad: Adani Group's flagship firm, Adani Enterprises Limited (AEL) has committed capital expenditure (capex) worth roughly Rs 10,000 crore for its airport business to be incurred over the next 7 years. AEL has also committed an investment of Rs 7,000 crore for coal and mining business during the current fiscal 2019-20.
Part of its "next set of businesses", as stated by Adani Group chairman Gautam Adani, airport management is being run by AEL's subsidiary Adani Airports Ltd which won bids for 6 airports recently. Of these, three airports including Ahmedabad, Lucknow and Mangaluru of Airports Authority of India have been approved by cabinet to be leased to AEL in a public private partnership (PPP) mode. Two other airports - Guwahati and Jaipur - are awaiting state approvals, while the one in Trivandrum is in litigation with the Kerala state government.
The committed investment of Rs 10,000 crore will entail an up-front payment of roughly Rs 1,600 crore for the three airports with cabinet approval, followed by an additional up-front payment of Rs 2,000 crore for the remaining airports. In an earnings call on Thursday, Jugeshinder Singh, AEL's chief financial officer, said that the remaining Rs 6000 crore of committed capex will be incurred over a period of 7 years.
"We have committed roughly Rs 10,000 crore investment over a period of 7 years for the airports business. We will have an up-front payment of Rs 3,600 crore for these 6 projects and we will undertake capex of approximately Rs 6,000 crore over a period of 7 years," said Singh, adding that the three airport projects will start generating revenues from April 2020.
Singh stated that the group would focus on both passenger and non-passenger revenues in its airports business going forward, with the latter to be tapped through its city-side business segment. "Typically, at Ahmedabad airport, there is about 11.2 million airport passengers, but the non-passenger segment is three times more than that. Currently, it has EBITDA is just about Rs 95 crore. We expect it to be materially higher once we take it up. We expect to cater the other 30 million people, who are not catered to right now," he said.
08/08/19 Vinay Umarji/Business Standard
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Part of its "next set of businesses", as stated by Adani Group chairman Gautam Adani, airport management is being run by AEL's subsidiary Adani Airports Ltd which won bids for 6 airports recently. Of these, three airports including Ahmedabad, Lucknow and Mangaluru of Airports Authority of India have been approved by cabinet to be leased to AEL in a public private partnership (PPP) mode. Two other airports - Guwahati and Jaipur - are awaiting state approvals, while the one in Trivandrum is in litigation with the Kerala state government.
The committed investment of Rs 10,000 crore will entail an up-front payment of roughly Rs 1,600 crore for the three airports with cabinet approval, followed by an additional up-front payment of Rs 2,000 crore for the remaining airports. In an earnings call on Thursday, Jugeshinder Singh, AEL's chief financial officer, said that the remaining Rs 6000 crore of committed capex will be incurred over a period of 7 years.
"We have committed roughly Rs 10,000 crore investment over a period of 7 years for the airports business. We will have an up-front payment of Rs 3,600 crore for these 6 projects and we will undertake capex of approximately Rs 6,000 crore over a period of 7 years," said Singh, adding that the three airport projects will start generating revenues from April 2020.
Singh stated that the group would focus on both passenger and non-passenger revenues in its airports business going forward, with the latter to be tapped through its city-side business segment. "Typically, at Ahmedabad airport, there is about 11.2 million airport passengers, but the non-passenger segment is three times more than that. Currently, it has EBITDA is just about Rs 95 crore. We expect it to be materially higher once we take it up. We expect to cater the other 30 million people, who are not catered to right now," he said.
08/08/19 Vinay Umarji/Business Standard
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