Capex for airports, expressway, green energy projects: How Adani Enterprises plans to use its QIP proceeds

Funds from the QIP will also be used to repay certain debts of its subsidiaries, primarily those of its airports business - Adani Airport Holdings Limited

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Gautam Adani’s flagship group firm Adani Enterprises Limited plans to use its QIP proceeds for funding various capital expenditure requirements for certain projects under its new energy ecosystem; improvement works and city side development works of certain existing airport facilities; construction of a greenfield expressway; and for setting up a polyvinyl chloride (PVC) plant.

Funds from the QIP will also be used to repay certain debts of its subsidiaries, primarily those of its airports business - Adani Airport Holdings Limited, as per an offer document filed by the company with stock exchanges.

Adani Enterprises on October 9 launched its QIP to raise as much as $500 million (Rs 4,200 crore) . The company may raise more funds using a green shoe option depending on investor demand.

Capex for new energy ecosystem

Adani Enterprises will use part of the QIP money for funding capital expenditure for its wind turbine manufacturing business to set up ‘Nacelles’ and ‘Hubs’ assembling facility and ‘Rotor Blades’ manufacturing facility by Adani New Industries Limited.

The company plans to expand its ‘Nacelles’ and ‘Hubs’ assembling facility and ‘Rotor Blades’ manufacturing facility of approximately 1.5 GW (gigawatts) per annum to 2.25 GW, a project costing Rs 1,131 crore.

Funds will also be used for setting up a solar module manufacturing and solar cell manufacturing facility by Adani New Industries Limited.

Adani is proposing to set up a 4.25 GW solar module and 5.07 GW solar cell manufacturing unit, in addition to the already existing 2 GW ingot-wafer manufacturing line. The capex for this project is estimated at Rs 7,657 crore. As of June 30, 2024, Adani had an operational capacity of 4 GW cell and module line.

Capex for airports

Adani Airport Holdings Limited has drawn up capex plans worth Rs 12,442 crore for its six airports at Ahmedabad, Jaipur, Lucknow, Guwahati, Mangaluru and Thiruvananthapuram.

The airports company plans to spend these funds for various airside improvement works, terminal improvement works, cargo terminal development, expansion of fuel storage and distribution, utility improvements; and for operational capital expenditure of these six airports.

Construction of greenfield expressway

Adani Road Transport Limited is building a 151.7 kilometres long access controlled six lane (expandable to eight lane) greenfield expressway from Budaun to Hardoi in the state of Uttar Pradesh, part of the so-called Ganga Expressway.

Adani is also constructing two other stretches of the Ganga Expressway from Hardoi to Unnao and from Unnao to Prayagraj.

The combined project cost of these three road projects stands at approximately Rs 16,575.84 crore.

Capex for setting up of a PVC plant 

Mundra Petrochem Limited, a subsidiary of the company, is in the process of establishing a petrochemical cluster in Mundra, Gujarat. Within this cluster, Adani is currently developing a polyvinyl chloride (PVC) project with a capacity of 1 million metric tonne (MMT) per annum with the potential to increase capacity up to 2 MMT per annum in future phases. The initial phase, with a capacity of 1 MMT per annum, is under construction and slated for commissioning by December 2026. The PVC Project is expected to include capabilities for manufacturing PVC, chlor-alkali, calcium carbide and acetylene units.

Repayment of loans

Funds from the QIP are also proposed to be used to repay part of loans of Adani Airport Holdings Limited, which has outstanding loans worth Rs 6,988.96 crore.

These loans have been availed from an Adani group entity named Adani Properties Private Limited and are due in March 2028.