Gautam Adani’s Vision: Transforming Infrastructure with $84 Billion

The Adani Group, led by billionaire Gautam Adani, has announced an ambitious plan to invest 7 trillion rupees (approximately $84 billion) in infrastructure projects over the next decade. This investment plan comes amidst the company’s recovery from a significant market capitalization loss following a report by Hindenburg Research that raised concerns about the group’s debt levels and the use of tax havens. The Adani Group, which operates India’s largest private port and is involved in airport and road development, denied all allegations from the report.

Key aspects of this investment include:

1. Infrastructure Projects: The specifics of the projects have not been elaborated, but given the group’s existing portfolio, it may include further developments in ports, airports, and roads.
2. Stake Divestment in Adani Wilmar: The group is considering divesting its stake in Adani Wilmar, a joint venture with Singapore’s Wilmar International, within the next three months. The Adani Group holds a 44% stake in this venture.
3. Financial Recovery and Strategy: The shares of Adani Group companies are recovering after the recent turmoil. The weighted average cost of capital for its core infrastructure business has remained stable at around 9.25-9.50%.
4. Capital Sources: About 80% of the company’s long-duration capital is sourced from the global market, with the remaining 20% coming from the domestic market. Adani Ports and SEZ, Adani Green Energy, Adani Power, and within Adani Enterprises (airports and roads) may tap the domestic bond market soon.
5. Future Bond Issues: The group may look at public issues of bonds from February 2024. Adani Green Energy and Adani Transmission might issue Regulation-S and Regulation-D bonds in 2024. Adani Green Energy needs to raise $350 million to refinance existing debt maturing in December 2024​​​​​​.

This strategic move by the Adani Group signifies a significant step in its journey towards expanding and diversifying its infrastructure portfolio, while also managing the financial challenges and market perceptions it currently faces.