Adani Enterprises Ltd

Last modified by Asif Farooqui on 2021/03/15 07:30

Contents

Overview
Business Segment
Industry Overview
Business Overview
Financial Highlights
- Business Highlights:
Recent developments
References

Overview

Since the listing in 1994, Adani Enterprises (NSE: ADANIENT) has consistently delivered value – maximizing returns for stakeholders and proactively participating in nation building activities.¹

Over the past three decades, Adani Enterprises Ltd (AEL) has broadened its presence across key industries, to emerge as a market leader. Adani Enterprises is now poised to nurture businesses that address issues of national importance.

Businesses such as Adani Ports and Special Economic Zone Limited, Adani Power, Adani Transmission, Adani Green Energy and Adani Gas have been demerged from Adani Enterprises and/or independently listed on the Indian stock exchanges, to synergise growth and facilitate its nation building endeavours.

To sustain its vision of an empowered nation, the company now remain focused on building infrastructure for Airports, Roads, Water, Data Centre and Solar manufacturing.

Business Segment

At Adani Enterprises Ltd, Adani Enterprises has always forayed into new business segments with a strategy to create a positive impact and create unmatched value. Each of the businesses have not only registered profitable growth, but also created unique positioning in their respective sectors. This incubating ideology is built on a strong foundation of Adani Group’s vision to respond strategically to some of India’s profound challenges and needs. As the country progresses at a rapid pace, at AEL Adani Enterprises has positioned itself to emerge as the largest private player in nation building efforts.²

Airports

The Adani Group has forayed into the civil aviation sector by strategically acquiring Airport Development & Maintenance mandates throughout the country. This move is bolstered by the Group’s desire to upgrade the existing airport infrastructure in India to best-in-class standards, thus offering customers the most definitive airport experience. Having bid for various Airports Authority of India (AAI) airports, AEL has emerged as the highest bidder for all six of them that had been put up for privatization:³

Ahmedabad
Trivandrum
Lucknow
Mangaluru
Guwahati
Jaipur

Data Center

Adani Enterprises Ltd (AEL) is the only company with inherent capabilities to build Data centres across the country. At AEL, Adani Enterprises is competitively placed with some key advantages, namely:⁴

Complete ownership of large land parcels across the country
Project management capabilities and resources availability
End-to-end power value chain (generation, transmission and distribution)
Fiber connectivity and strong network connectivity
Renewable Power generation to ensure sustainability
Strong Policy advocacy credentials
As a part of its initial plan, the company intend to build Data Centers in NCR, Mumbai, Chennai & Hyderabad

Defence and Aerospace

Adani Defence and Aerospace leads Adani Enterprises Ltd., foray into defence and aerospace and its vision is to help transform India into a destination for world class high tech defence manufacturing aligned to the ‘Make in India’ initiative.⁵

India is determined to be among the top five countries in the world in defence capabilities and a vibrant defence industry is essential to securing national sovereignty and self-reliance in defence.

Adani Enterprises is working with Global OEM’s and Indian MSMEs to manufacture fighter aircraft, unmanned aerial systems, helicopters, submarines, air defence guns, missiles and small arms. Adani Enterprises is also developing tier 1 capabilities in avionics and systems, opto-electronics, aerostructure and precision components, aerospace composites as well as radar and electronic warfare systems.

Adani Enterprises is making strategic investments and setting up global standards defence manufacturing to help grow MSMEs and India’s defence ecosystem.

The company's aim is to enhance India’s defence and industrial capabilities and to help the nation realise its ambition of strategic independence.

Edible Oil and Foods

Adani Wilmar Limited (AWL) is a joint venture incorporated in January 1999 between Adani Group, a the leader in International Trading & Private Infrastructure with businesses in key industry verticals such as resources, logistics and energy, and Wilmar International Limited – Singapore, Asia’s leading Agri business group. The Group was created with a vision of ‘Nation Building’ by developing assets of national economic significance. Wilmar’s business activities include oil palm cultivation, oilseed crushing, edible oil refining, sugar milling and refining, specialty fat, oleo chemical, biodiesel and fertilizer manufacturing and grain processing. It has over 850 manufacturing plants and an extensive distribution network covering China, India, Indonesia and 30 other countries.⁶

The joint venture kicked off with the commissioning of India's first port-based refinery at Mundra in Gujarat and similar units were developed in other locations.

Agro

The Company has also set up a marketing network in major towns across India to cater to the needs of wholesale, retail and organized retail chain stores. The Company which is marketing Indian fruits under the brand name FARM-PIK, has expanded its footprint in the branded fruit segment. The Company also imports Apples, Pears, Kiwis, Oranges, Grapes etc. from various countries for sale in India.

Integrated Resources Management

In its endeavour towards fulfilling the gap in the availability of coal at thermal power plants of India and to meet coal needs of the nation, the company ventured into coal management in 1999. It was one of the urgent needs of an emerging economy. At the same time the country needed richer coal to regulate the impact of dwindling fossil fuels on the economy. The company delivered its first rake of imported coal to Suratgarh thermal power station.⁸

Today, Adani Enterprises Ltd. (AEL) is largest coal supplier in India and one of the leading suppliers of the vital minerals globally. Adani Enterprises is the largest importer of coal from Indonesia. And, its presence in the entire value chain, including logistics, has made it one of the significant revenue earners for the Indian Railways.

Mining Services

At Adani Enterprises Limited, the company bridge the gap between demand and supply of coal through a combination of imports and responsible mining. Besides contributing to the domestic coal production with the help of environment friendly practices, Adani Enterprises has also developed a strong supplier base in South Africa, Australia, USA and Russia among other coal rich geographies.⁹

In just about two years after setting up its mining business unit, the company pioneered the Mine Developer and Operator (MDO) model in 2009 starting with the Parsa East and Kanta Basan Coal Blocks. This project from planning to production was done in a record time of 3.5 years, which is a benchmark for the coal mining industry in India. In March 2013, the company successfully dispatched the first rake of coal to a state-owned power generation utility of Rajasthan.

The company's vision of achieving energy security for the nation is gradually transforming lives across the nooks and corners of the country. The project of Parsa East & Kanta Basan, for instance, has employed more than 400 tribal people. A school has been started to impart quality education to tribal children. Free medical assistance and health care are now available at their doorstep. Vocational training to women is making them self-sufficient and financially independent. The company has also established a football academy at Ambikapur to nurture and nourish the aspirations of the tribal youth.

Road, Metro and Rail

To contribute towards Nation Building and Infrastructure development, the Company intends to tap the opportunities in the road, metro & rail sector by developing national highways, expressways, tunnels, metro-rail, railways, etc.¹⁰

Adani Group has a successful track record of nurturing businesses in the Infrastructure Sector. The group has developed several railway lines in India and abroad. Adani owns the longest private railway lines spanning about 300 km in India. These private rail lines are connected to its ports, mines and other business hubs to ensure seamless cargo movement.

As part of the new business, the Group will focus on nation-wide projects initiated by the National Highways Authority of India (NHAI) and Ministry of Road Transport and Highways (MORTH), Ministry of Railways, Metro Corporations of the various States and similar projects under the purview of other Central or State Authorities.
As a developer, the Company will primarily target PPP projects structured on the Build-Operate-Transfer (BOT), Toll-Operate-Transfer (TOT) & Hybrid-Annuity Mode (HAM) models.
The Group has won 3 projects (Bilaspur-Pathrapali in Chattisgarh, Suryapet-Khammam and Mancherial –Repallewada in Telangana) comprising approximately 650 lane kms under HAM model of NHAI.

Solar Manufacturing

Incubating India’s solar dream through Adani Solar, Adani Enterprises has set up the country’s first and largest vertically integrated Solar Photovoltaic Manufacturing and EPC business in Mundra Special Economic Zone (SEZ).¹¹

With a 1.5 GW capacity along with Research and Development (R&D) facilities within an Electronic Manufacturing Cluster (EMC) facility, this state-of the-art Adani Solar plant produces Solar Cells and Modules. It is well supported by manufacturing units of critical components that includes EVA, Back-sheet, Glass, Junction box and Solar cell and string interconnect ribbon, designed to achieve maximum efficiency in the Indian market.

With projects over 250 MW commissioned and over 400 MW under execution, Adani Solar is also India’s fastest growing rooftop and distributed solar EPC Company. It is one of the leading partner in the government’s “Make in India” initiative through its various measures of 12 GW CPSU scheme, KUSUM scheme etc.

The cutting-edge technology, with machines and equipment sourced from the best-in-class producers, aim to help in cost leadership, scale of operations and reliability standards as per global benchmarks. With its multi-level infrastructure, the manufacturing facility will be optimized for scaling up to 3.5 GW of modules and cells under a single roof.

Water

Foreseeing the massive need for water infrastructure capacity augmentation in the country the company at the Adani Group, have decided to focus on this business segment. The Group has taken the first step by bagging the prestigious waste water treatment, recycle and reuse project at Prayagraj under the National Mission for Clean Ganga Framework.¹²

The Group proposes to build upon this in the coming year by exploring similar opportunities. In addition to this, the Group will also explore opportunities in the desalination water space wherein projects for desalination of sea water/brackish water shall be taken up to produce portable water for consumption of general public and industrial purpose.

Industry Overview

Coal Business

At present, Coal is the most important and abundant fossil fuel in India and accounts for 54.2% of the country’s energy need. India is the second largest producer of Coal in the world. The Production of Coal in India reached 729.08 Mn tonnes in FY 2019-20 as compared to 728.72 Mn tonnes during the previous year. Driven by the rising population, expanding economy and a quest for improved quality of life, energy usage in India is expected to rise.¹³

Further, the country is also the second largest importer of Coal and total import in FY 2019-20 (till December 2019) stood at 186.64 Mn tonnes. Of the total, import of thermal coal also grew by 12.6% reaching 200 Mn tonnes in 2019, the highest since 2014. The government is however is investing in developing more domestic resources and aims to stop the import of thermal coal from FY 2023- 24. In an effort to boost the growth of the industry the government has allocated H 700 crore in the interim budget 2020-21 under the head “Exploration of Coal and Lignite”. The allocation is meant for preliminary drilling to assess coal availability to meet the sizeable increase in the demand for coal. The scheme is implemented by Central Mine Planning and Design Institute Limited (CMPDIL). Moreover, the Government allocated 5 new coal mines in the country with a view to increase the production of coal in the country. This will boost the coal production in the country and reduce the dependence of industries on imported coal.

Airports

At present, India has 136 commercially-managed airports by Airports Authority of India (AAI) and 6 under PublicPrivate Partnerships (PPP) for Operation, Maintenance and Development of airports, making it the third largest domestic market for civil aviation in the world. The number of operational airports is expected to increase to 190-200 by FY 2039-40. The airline operators in India have scaled up their aircraft seat capacity from an estimated 0.07 annual seats per capita in 2013 to 0.12 in 2018.

Passenger traffic in India stood at 293.99 Mn in FY 2019- 20 (till January 2020). Of the total, domestic passenger traffic reached 235.44 Mn and International passenger reached 58.55 Mn. Domestic freight traffic stood at 1.14 Mn tonnes, while international freight traffic was at 1.70 Mn tonnes in FY 2019-20 (till January 2020).

Domestic and international aircraft movements reached 1.82 Mn and 0.37 Mn in FY 2019-20 (till January 2020), respectively in the country. The fundamental drivers of air passenger demand – include rising population, demographic change and increasing disposable incomes. To cater to the rising air traffic, the Government of India has been working towards increasing the number of airports. 100 more airports, 16 private greenfield airports, and 15 AAI airports are to be made operational by FY 2023-24 (For details refer graph 1), to ease the strain on existing airport capacities. Six airports (Ahmedabad, Guwahati, Jaipur, Lucknow, Mangalore, and Thiruvananthapuram) have been taken up for development under PPP mode to bring in efficiency and resources. Five new greenfield airports [Durgapur (West Bengal), Shirdi (Maharashtra), Pakyong (Sikkim), and Kannur (Kerala) and Kalaburagi/ Gulbarga (Karnataka)] were successfully operationalised this year.

Automation continues to be on the rise to augment capacity utilisation at airports. Since the scheme for operationalising unserved airports (Udan) was taken up, a total of 43 airports have been operationalised, of which 4 were done in FY 2019-20. Additionally, to continue with the high growth trajectory, the Government has been providing a congenial environment so that the Indian carriers double their fleet from about 680 aircraft (number of aircrafts endorsed on Scheduled Airlines) at the close of November 2019 to over 1,200 by FY 2023-24. Easing leasing and financing from Indian shores in conformance with the provisions of the Cape Town Convention and Protocol on Aircraft Equipment, efficient use of air traffic rights, encouraging domestic and international passenger and goods transfers, and rationalising the tax regime would help to achieve.

Infrastructure

India is expected to become the third largest construction market globally by 2022. From roadways, railways to airports and other smart-city initiatives, the last few years have witnessed a phenomenal change, leading to world-class facilities coming up across various parts in the country. Infrastructure Industry in India has been experiencing rapid growth in different sectors with the development of urbanisation and increasing involvement of foreign investments in this field. This growth is likely to continue on the back of rapidly developing services and manufacturing sector, increasing consumer demand (largely driven by increased spending by India’s middle class) and the government’s commitment to rejuvenate the agricultural sector and improve the economic conditions of India’s rural population. Additionally, with infrastructure being one of the core areas for economic growth, the Government of India has introduced initiatives like National Infrastructure Pipeline. These initiatives are expected to help meet the $5-trillion economy target by FY 2024-25.

National Infrastructure Pipeline (NIP)

A National Infrastructure Pipeline of H 111.3 lakh crore has also been launched on December 31, 2019. It is a first-ofits-kind, whole-of-government exercise to provide worldclass infrastructure across the country, and improve the quality of life for all citizens, improve ease of living, and provide equitable access to infrastructure to all. It aims to improve project preparation, attract investments (both domestic and foreign) into infrastructure, and will be crucial for target of becoming a $5 trillion economy by FY 2024-25. The highest investments are proposed for the energy sector (24%), followed by roads (18%), urban development (17%) and railways (12%).

Water

The use of water globally has increased by a factor of six over the past 100 years and continues to grow steadily at a rate of about 1% per year as a result of increasing population, economic development and shifting consumption patterns. Combined with a more erratic and uncertain supply, and climate change will only aggravate the situation of currently water-stressed regions, and generate water stress in regions where water resources are still abundant today. As per the United Nations World Water Development Report 2020 (WWDR), around 2.2 Bn people still do not have access to clean and readily available drinking water and that up to 4.2 Bn are without access to safe sanitation.

As compared to the global context, India is home to ~18% of the global population but has only 4% of the global water resources. The country’s per capita water availability is around 1,100 cubic meter (m3), well below the internationally recognised threshold of water stress of 1,700 m3 per person, and dangerously close to the threshold for water scarcity of 1,000 m3 per person. Population growth and economic development has put further pressure on water resources. Climate change is expected to increase variability and to bring more extreme weather events. The water demand in all sectors by 2050 is estimated to exceed its supply. While demand is growing, the quality of water supply is dwindling. Per capita water supply is declining on an annual basis and is likely to touch the benchmark of water-scarce supply in the coming years. Groundwater levels are also decreasing, although globally, India is the highest user of groundwater, especially in irrigation and domestic sectors. Its quality is also a cause of concern.

Although, the country has started to take critical steps to mitigate water stress, including setting up the Jal Shakti Ministry to prioritise all water issues—including supply, drinking water and sanitation—under one national government umbrella. Moreover, government has announced in the Budget through the allocations for the water and sanitation sectors, it aims to achieve the Sustainable Development Goal (SDG 6) of ensuring availability and sustainable management of water and sanitation for all. These are welcome steps given the critical condition of India’s water sector, which is highly stressed. The Ministry of Jal Shakti has received an allocation of H 30,478 crore in FY 2020-21, an increase of H 4,600 crore (18%) over the revised estimates of FY 2019-20.

Given the allocation of funds for water and sanitation sectors of H 30,478 crore for 2020-21 (higher than the 2019-20 figure by about 18%), India’s commitment to implementing the SDG 6 goal is evident.

Defence Industry

India is currently the 5th largest economy and the 3rd largest spender on defence in the world. The defence spending has been growing in recent years and is expected to continue its growth trajectory. The increase in spending also indicates the huge availability of opportunities for the domestic and global companies in the defence and aerospace sector. At present, about 70% of the defence requirements are met through imports. Imports account for a major portion of defence-related requirements and this offers a huge opportunity for foreign investors. However, In the coming years, the Government targets to step up local sourcing to reduce the defence budget by a significant number. Since independence, the goal of self-reliance has propelled India to nurture and expand its defence industrial base. This has led the country to set an ambitious target for the Defence industry to reach $26 Bn by 2025, which would also help the economy to realise the $5 trillion mark by 2024.

Rs 323,053 crore Allocated towards defence sector in the Interim Budget 2020-21 as compared to Rs 301,866 crore in FY 2019-20

Solar Panel Manufacturing

Indian power sector is undergoing a significant change that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in India. The Indian government’s focus on attaining ‘Power for All’ has accelerated capacity addition in the country. As of March 2020, the National Electric Grid had an installed capacity of 370.10 GW. India’s power sector is one of the most diversified in the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable nonconventional sources such as wind, solar, and agricultural and domestic waste. However, power production in India is still dominated by Coal.

As of March 2020, 54.2% of India’s electricity has been generated from coal-based plants. Out of total electricity produced, solar power accounts 34.63 GW or around 9.36% as of March 2020 which reflects a growth of 22.8% YoY from 28.18 GW generated in the same period last year. The capacity addition of renewable energy sources has grown at a CAGR of 22% in the 5-year period to February 2020. Within renewable energy, the capacity addition by solar power has grown the fastest – at a CAGR of 67% during this period. It accounted for 47% of the new capacity addition in FY 2019-20, surpassing the 30% of conventional power sources such as coal. Further, the dependency on Coal is expected to reduce in the future as the government of India has has set an ambitious target of 175 GW of renewable power by 2022 that includes - 100 GW of Solar power, 60 GW from Wind power, 10 GW from Biomass power, and 5 GW from Small Hydro power.

Additionally, India has solar modules manufacturing capacity of 7-8 gigawatts (GW). After the implementation of the safeguard duty, imports of solar cells and modules have fallen drastically. The sector imported solar modules and cells worth nearly $1.4 Bn during FY 2019-20 till November 2020, a decline from $2.15 Bn in FY 2018-19. The safeguard duty has had a positive impact for Indian manufacturers of solar equipment as their share in total project installation increased from 15% to 25% in 2019.

Major factors driving the solar market are the declining cost of the solar module and the government policies like allowing 100% FDI under automatic route for renewable power generation and distribution projects which is expected to increase the participation from global players into the Indian market. Moreover, Solar energy is becoming inexpensive in comparison to other conventional energy sources due to innovations in the solar sector that has reduced the global average selling prices of solar PV. With the anticipated improvements in technology and increased supply of panels from China/Europe, the capital costs are expected to stabilise at lower levels. With government promoting the solar installation in rural area by providing subsidised solar panels and other incentives, the solar installation is ought to increase and is expected to drive the market.

Edible oil

India is one of the top three consumers of edible oils in the world. To fulfil the domestic edible oil demand, the country however largely relies on imports which account for more than 70% of the total domestic edible oil requirements. Of the total, palm oil is nearly entirely imported and constitutes ~40% of total edible oil consumption and ~60% of total edible oil imports in India.

Total Oilseeds production in the country during FY 2019-20 is estimated at 34.19 Mn tonnes which is higher by 2.67 Mn tonnes than the production of 31.52 Mn tonnes during FY 2018-19. Further, the production of oilseeds during FY 2019-20 is higher by 4.54 Mn tonnes than the average oilseeds production. Despite being the 4th largest oilseed producing country in the world, the country is still an oil deficient economy. There is a demand and supply mismatch of edible oil. Consumption of edible oil in India has increased from less than 6 kg per capita in 1992- 93 to 19 kg in recent years. The growth in consumption is predominantly driven by increasing income, urbanisation, changing food habits, and deeper penetration of processed foods. Domestic oilseed industry hasn’t been able keep pace with the rising demand owing factors such as limited size of land, dearth of technological improvements in the field, vagaries of weather, etc.

Moreover, the availability of cheap palm oil from South Asian countries is also an important contributory factor. Presently, India imports close to 70% of its total edible oil requirements from various countries.

However, to increase domestic availability and reduce import dependency, a National Mission on Edible Oils (NMEO) is proposed for next five years (FY 2020-25).

The proposed mission will aim to increase production from 30.88 to 47.80 Mn tonnes of oilseeds which will produce 7.00 to 11.00 Mn tonnes of edible oils from Primary Sources by FY 2024-25. Similarly, edible oils from secondary sources will be doubled from 3.50 to 7 Mn tonnes.

Data Centre

India has been making a move towards being an inclusive digital economy where more and more data is being generated across platforms such as Cloud and social media as well as accessed by more people using mobile technology. All this data needs to be stored, managed and disseminated to users via public and private cloud, making data centres a key pillar in digital transformation.

Data centre industry in India is projected to register threefold growth in revenue to $3.2 Bn by CY 2024 and is likely to propel the development of additional real estate space of 7.8 Mn sq. ft. for setting up data centre facilities. This growth is primarily in data usage and storage driven by the country’s e-commerce sector, use of smartphones and social media, government’s focus on digital economy and rise in technology-driven start-ups, increasing data centre space.

With the advent of internet and mobile phones, India’s data centre industry continues to provide data storage, computing and other value-added services. To meet the rising demand arising from data localisation and rising data usage, India’s data centre industry capacity is projected to increase from 350 MW (design IT power load) in FY 2018-19 to 781 MW in the next five years, an increase of 431 MW. Mumbai and Chennai will account for 76% share of these new capacity additions, other key metros such as Delhi-NCR, Pune and Hyderabad are expected to follow. Other factors such as the issue of right to privacy and data protection is being widely discussed leading to data protection laws. The data localisation laws are expected to be the tipping point for growth of Indian Data Centre industry. Additionally, with the outbreak of COVID-19, companies across the globe have started operating remotely, which is also likely to increase the need for data centre. The country is witnessing an increasing interest for data centre facilities from enterprises and investors, both domestic and international. Businesses around the world continue to work on data consolidation, storage and cloud adoption.

Business Overview

Natural Resources Business

Parsa East and Kente Basan Coal Block

Rajasthan Rajya Vidyut Utpadan Nigam Limited (“RRVUNL”) has been allocated the Parsa East and Kente Basan Coal Blocks (PEKB) in Chhattisgarh. RRVUNL has entered into a Coal Mining and Delivery Agreement with Parsa Kente Collieries Limited (PKCL) [a Joint Venture Company of RRVUNL and Adani Enterprises Limited] appointing PKCL as Sole Mining Contractor. PKCL as Mine Developer and Operator of PEKB is undertaking development, mining, beneficiation of coal, arranging transportation and delivery of washed coal to end use power projects of RRVUNL. The project commenced Mining Operations and dispatches of coal to Thermal Power stations of RRVUNL in March 2013. For Financial Year 2019-20, Raw coal Production was 15 MMT, Washed coal Production was 11.70 MMT and Washed coal dispatch to Thermal Power Plants of RRVUNL was 11.23 MMT.

Kente Extension Coal Block

RRVUNL has been allocated the Kente Extension Coal Block at Chhattisgarh. RRVUNL has entered into a Coal Mining and Delivery Agreement with Rajasthan Collieries Limited (RCL) [a Joint Venture Company of RRVUNL and Adani Enterprises Limited] appointing RCL as Sole Mining Contractor. RCL as Mine Developer & Operator of Kente Extn Coal Block will be undertaking development of the Coal Block, mining, beneficiation of coal and arranging for transportation and delivery of coal to end use power projects of RRVUNL. The Coal Block is under development stage.

Parsa Coal Block

RRVUNL has been allocated the Parsa Coal Block at Chhattisgarh. RRVUNL has entered into a Coal Mining and Delivery Agreement with Rajasthan Collieries Limited (RCL) [a Joint Venture Company of RRVUNL and Adani Enterprises Limited] appointing RCL as Sole Mining Contractor. RCL as Mine Developer & Operator of Parsa coal block will be undertaking development of the Coal Block, mining, beneficiation of coal and arranging for transportation and delivery of coal to end use power projects of RRVUNL. The Coal Block is under development stage.

Gare Pelma Sector-III Coal Block

Chhattisgarh State Power Generation Company Ltd. (CSPGCL) has been allocated the Gare Pelma Sector -III Coal Block at Chhattisgarh for captive use in their Thermal Power Plant in the State of Chhattisgarh. CSPGCL has appointed Gare Pelma III Collieries Limited (GPIIICL), a 100% subsidiary of Adani Enterprises Limited, as Mine Developer and Operator (MDO) for Development, Operation, Mining and delivery of coal to end use power project of CSPGCL. CSPGCL has entered into a Coal Mine Services Agreement with GPIIICL on 16th November 2017. GPIIICL as Mine Development & Operator of Gare Pelma Sector III Coal Block is undertaking development of the Coal Block, mining and arranging for transportation and delivery of coal to end use power projects of CSPGCL. The Mine Opening Permission of the Coal Block was obtained on 26th March 2019 and overburden removal commenced on 28th March 2019.

Coal Production commenced on 6th December 2019 and coal produced in FY 2019-20 is 0.511 MMT. Coal Dispatch commenced on 16th March 2020 and total coal dispatched in FY 2019-20 is 0.015 MMT.

Talabira II & III Coal Block

NLC India Limited (NLCIL) has been allocated the Talabira II & III Coal Block at Odisha for captive use in their Thermal Power Plant. NLCIL has appointed Talabira (Odisha) Mining Private Limited (TOMPL), a subsidiary of Adani Enterprises Limited, as Mine Developer and Operator (MDO) for Development, Operation, Mining and delivery of coal to NLCIL. NLCIL has entered into a Coal Mining Agreement with TOMPL on 23rd March 2018. TOMPL as Mine Development & Operator of Talabira II & III Coal Block is undertaking development of the Coal Block, mining, loading, transportation and delivery of coal to delivery points.

The Mine Opening Permission of the Coal Block was obtained on 29th March 2019.

During FY 2019-20, TOMPL has commenced overburden removal and quantity removed till 31st March 2020 is 0.734 MBCM.

Suliyari Coal Block

Andhra Pradesh Mineral Development Corporation Limited (APMDC) has been allocated the Suliyari Coal Block at Madhya Pradesh for commercial mining of coal. APMDC has appointed Adani Enterprises Limited (AEL) as Mine Developer and Operator (MDO) for Development, Operation, Mining and delivery of coal to APMDC. APMDC has entered into a Coal Mining Agreement with AEL on 8th March 2018. The Coal Block is under development stage. AEL as Mine Development & Operator of Suliyari Coal Block will be undertaking development of the Coal Block, thereafter, mining, loading, transportation and delivery of coal to delivery points.

Bailadila Deposit – 13 Iron Ore Mine

NCL (NMDC-CMDC Limited) is the Mining Lease holder of Bailadila Deposit -13 Iron Ore Mine in the state of Chhattisgarh. NCL has appointed Adani Enterprises Limited (AEL), as Mine Developer and Operator (MDO) for Development, Operation, Mining and delivery of iron ore to NCL. NCL has entered into an Iron Ore Mining Services Agreement with AEL on 6th December, 2018. AEL has awarded sub-contract to Bailadila Iron Ore Mining Private Limited (BIOMPL), a 100% Subsidiary Company of Adani Enterprises Limited (AEL), for development of the Iron Ore Block, mining, loading, transportation and delivery of iron ore to delivery point. The Iron Ore mine is under development stage.

Gare Palma Sector I Coal Block

Gujarat State Electricity Corporation Limited (GSECL) has been allocated the Gare Pelma Sector-I Coal Block at Chhattisgarh for captive use in their Thermal Power Plants in the State of Gujarat. GSECL has issued conditional Letter of Acceptance (LoA) to Consortium of Adani Enterprises Limited (AEL, 74%) and Sainik Mining and Allied Services Limited (SMASL, 26%) on 15th December, 2018 for Development, Operation, Mining and delivery of coal to end use power projects of GSECL. Coal Mine Services Agreement between the AEL-SMASL Consortium and GSECL is yet to be signed

Gare Palma Sector II Coal Block

Maharashtra State Power Generation Co. Ltd. (MAHAGENCO) has been allocated the Gare Pelma Sector-II Coal Block at Chhattisgarh for captive use in their Thermal Power Plants in the State of Maharashtra. MAHAGENCO has issued Final Letter of Acceptance (LoA) to Adani Enterprises Limited (AEL) on 5th November, 2019 for Development, Operation, Mining and Loading into wagon for delivery to end use power projects of MAHAGENCO.

AEL has formed SPV named “Gare Palma II Collieries Private Limited”. Coal Mine Services Agreement between Gare Palma II Collieries Private Limited and MAHAGENCO is yet to be signed.

Gidhmuri Paturia Coal Block

Chhattisgarh State Power Generation Company Ltd. (CSPGCL) has been allocated the Gidhmuri Paturia Coal Block at Chhattisgarh for captive use in their Thermal Power Plants in the State of Chattisgarh. CSPGCL has appointed Gidhmuri Paturia Collieries Private Limited (GPCPL), a SPV of Adani Enterprises Limited (AEL, 74%) and Sainik Mining and Allied Service Limited (SMASL, 26%) as Mine Developer and Operator (MDO) for Development, Operation, Mining and delivery of coal to CSPGCL. CSPGCL has entered into a Coal Mining Agreement with GPCPL on 2nd May 2019. GPCPL as Mine Development & Operator (MDO) of Gidhmuri Paturia Coal Block will be undertaking development of the Coal Block, mining and arranging for transportation and delivery of coal. The Coal Block is under development stage.

Kurmitar Iron Ore Mine

Odisha Mining Corporation Limited (OMCL) is the Mining Lease holder of Kurmitar Iron Ore Mine in Sundargarh District, in the state of Odisha. Kurmitar Iron Ore Mining Private Limited (KIOMPL), a 100% Subsidiary Company of Adani Enterprises Limited (AEL), has been appointed by OMCL as the Mine Developer and Operator (MDO) for Development, Operation, Mining, transportation and delivery of iron ore to delivery point. OMCL has entered into an Iron Ore Mining Agreement with AEL and KIOMPL on 31st October, 2019. The Iron Ore mine is under development stage

Resources Mining in Indonesia

PT Adani Global, Indonesia a wholly-owned step down subsidiary of the Company, has been awarded coal mining concession in PT Lamindo Inter Multikon (stepdown subsidiary in Bunyu Island, Indonesia).

The Bunyu Mines has Joint Ore Reserves Committee (JORC) compliant resource of 269 Mn Metric Tonnes (MMT) for both the mines (i.e. combined). Production from the mine during the year 2019-20 has been at 1.05 Mn Metric Tonnes (MMT).

Resources Mining and related Infrastructure in Australia

The company's wholly owned step down subsidiaries in Australia have 100% interest in the Carmichael mine in the Galilee Basin in Queensland, Australia.

During the year ended 31st March, 2020, the Group has been working on the development of the coal mining tenements situated in the Galilee Basin in Queensland (Australia).

Road, Metro and Rail

Adani Enterprises Limited (AEL) is focused on incubating successful businesses to address the Country’s growing appetite for Infrastructure. With reference to its vision of Nation building, the company remain committed to build Infrastructure to boost India’s socio-economic growth. To contribute towards Nation Building and infrastructure development, company wants to tap the opportunity in the Road, Metro & Rail sector by developing National Highways, Expressways, Tunnels, Metro-Rail, Rail, etc. Adani group is confident of positioning itself as dominant player in the Road, Metro and Rail sector.

Water

Realising the above, Jal Shakti Ministry has been taking various initiatives and focusing on programmes such as ‘National Mission for Clean Ganga (NMCG)’ & ‘National River Conservation’ for pollution abatement of Ganga & Other Rivers, ‘Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)’ for extending coverage of irrigation with improved efficiency of micro-irrigation, ‘Jal Jeevan Mission (JJM)’ for providing piped water connection to 14.6 crore rural household by 2024, ‘Jal Shakti Abhiyaan’ to stimulate rainwater harvesting and water conservation, ‘National River Linking’ projects to connect 37 rivers across the nation to ensure adequate water though out the year in all regions etc

The Group has taken the first step by bagging the prestigious Waste Water Treatment project at Prayagraj City under the National Mission for Clean Ganga Framework which comprises Construction Three (3) new Sewage Treatment Plants (STP) of cumulative 72 MLD capacity and Rehabilitation of Six (6) existing STPs of cumulative 254 MLD capacity with 15 years O&M. For execution of Project, Special Purpose Vehicle (SPV) named Prayagraj Water Pvt. Ltd. (PWPL) was formed and the Concession Agreement was executed in Jan’19 among PWPL, UP Jal Nigam & National Mission for Clean Ganga. Construction work of new STPs and Rehabilitation work of existing STPs are in Progress.

Defence

During the year, the company further ramped up its efforts in building a vibrant defence ecosystem which caters not just for India but also for the Export markets. The Company’s Joint Venture with Elbit Systems (Israel) exported the first shipset of the Hermes 900 fuselage to Israel with Zero defects, Zero rework and Zero safety incidents. The successful delivery is a testimony to the company’s excellence in industrialisation, engineering and quality systems and the ability to deliver products with zero-concessions

With the confidence of the customers reinforced by the excellence demonstrated in its first delivery, the Joint Venture has received two additional orders for Thor and Skylark drones. The order for Thor Mini-Drones is the largest order that shall be executed by any Indian Company. The Company also has signed a Memorandum of Understanding with Elbit Systems for setting up a worldclass research and development centre in India.

Small Arms is one of the most fundamental requirement for the armed forces and other security personnel. Committing to create complete self-reliance in this area, the company through its subsidiary Adani Land Defence Systems and Technologies Limited has agreed to acquire a majority stake in a Joint Venture of Israel Weapon Industries Limited. The Joint Venture shall address the requirement of Small Arms and Weapons for 1.2 Mn Army Personnel and a similar number for paramilitary and state police personnel through indigenously manufactured Arms. The Joint Venture shall also start bringing critical capabilities like barrel manufacturing into the Country in the coming year.

India is the fastest growing aviation market in the world with the number of aircraft expected to quadruple in the next 20 years. Consequently the Aircraft Services Market shall also witness explosive growth in the coming years. As per estimates, the size of the aircraft services market is estimated at US$145 Bn till 2037. Adani and Airbus have come together with a vision of offering customers a one-stop shop for all aircraft related services across India and South Asia. The two Companies shall work on multiple opportunities like aircraft maintenance, overhaul and repair, component services, training, digital solutions, airport services across India and South Asia.

In its quest for building indigenous design and development capabilities within the country, the Company partnered with Delhi Technological University to indigenously design, develop the unique swarm drone solutions for the India Armed Forces making India only the fifth country in the world to have indigenous capabilities in swarm development. These swarms intended to be deployed by the Armed Forces in search and rescue missions are capable of operating in GPS denied environments, can detect human life signs and can carry a payload of 3kgs for a distance of 90km. The Company intends to commercialise and explore further applications of this technology going ahead.

Airports

Adani Group Foray into Airports

In line with its vision to be the globally admired leader in the integrated infrastructure businesses, Adani Group has made its maiden venture into the airports sector by bidding for Operation, Management & Development of six airports viz. Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati & Thiruvananthapuram. Adani Enterprises Limited (AEL) has been declared as the highest bidder for all the six airports and have got the Letter of Award (LoA) for three airports viz. Ahmedabad, Lucknow & Mangaluru from Airports Authority of India (AAI). Subsequently, the Concession Agreement (CA) for these three airports have been entered on 14th February 2020. As per the CA, AEL has the concession to operate, manage & develop the airports for a period of 50 (fifty) years commencing from the date of Commercial Operations (COD).

Adani Group’s Vision for Airport Vertical

Adani Group’s focus is to create the world class infrastructure and provide the world class services to the Passengers. The Group’s focus is not only to provide the best in class passenger experience to all the passengers travelling from its airports but also to provide an unique experience to the non-passenger customers, given the location of the airports at the city centre.

Solar Manufacturing

The Company has set up a vertically integrated Solar Photovoltaic Manufacturing facility of 1.2 GW Capacity along with Research and Development (R&D) facilities within an Electronic Manufacturing Cluster (EMC) facility in Mundra Special Economic Zone (SEZ). The state-of-the art large-scale integrated manufacturing plant to produce Silicon Ingots/wafers, Silicon Solar Cells, Modules and support manufacturing facilities that includes EVA, Backsheet

At 1.2 GW of production, this plant is the largest vertically integrated producer of Solar Cells and Modules in India and well supported by manufacturing units of critical components designed to achieve maximum efficiency in the Indian market. On account of the process engineering and innovations, its plant is capable to produce modules of upto 1.5 GW. This Solar PV manufacturing facility within EMC facility is the first to be located in an SEZ under the M-SIPs scheme under which the investment by MSPVL has been approved and a major portion of the said capex subsidy received during the FY 2019-20.

The state-of-the-art manufacturing facility with multilevel infrastructure is being optimised for scaling up to 3.5 GW of modules and cells under a single roof. The unit is located in one of the world’s largest Special Economic Zone at Mundra, Gujarat and hence plays host to the entire solar manufacturing ecosystem from Polysilicon to modules, including ancillaries and supporting utilities. MSPVL is facilitating the thrust of GoI’s “Make in India” concept through its various measures of 12GW CPSU scheme, KUSUM scheme etc. to achieve its target of 100 GW by 2022.

Agro

Adani Wilmar Ltd

The Company entered the edible oil refining business through a 50:50 joint venture company, Adani Wilmar Limited (AWL) with Singapore’s Wilmar group. Since its inception in the year 2000, “Fortune” has been a brand dear to millions of households in the country. The brand is geared up to meet the new challenges in the future not just as a No.1 Oil Brand but as a No.1 Foods Brand. AWL takes pride in being one of India’s fastest growing food FMCG companies. With a 19.3% market share and growth of 10.6% in Refined Oil Consumer Pack (ROCP) category (Source: Nielsen Retail Monthly Index February 2020 report), “Fortune” continued to be the undisputed leader among edible oil brands in India with largest variety of oils under a single brand name.

Today, after almost 2 decades, the brand Fortune is transforming its visual identity with the launch of a new logo that reflects modernity and its fast-evolving product offerings. The company is confident that with this renewed zeal and enthusiasm, more households will be reached in the country and especially the younger families who believe in modern outlook of the society. The company is also completely prepared for this transformation in its journey from oil to food and has already started taking huge strides with the launch of several new products. Understanding the changing lifestyle of its consumers, the company went a step ahead and made a simple food into a superfood by adding healthy grains to the usual khichdi and introduced “Fortune Superfood Khichdi” in three tasty regional flavors. In order to cater to the regional preferences, AWL also launched variants in its existing Basmati Rice category. like Sona Masuri Regular, Sona Masuri Supreme, Wada Kollam, Banskanthi Rice, Govinda Bhog, Miniket and Gujarat Jeerasar to choose from. Similarly, as a logical extension to the successful launch of “Fortune Chakki Fresh Atta”, the company introduced products like Maida, Sooji and Rawa to further strengthen its food portfolio. Moving out of the kitchen and into the personal and skin care category, AWL launched its first product – Alife Soap in four variants namely Lime, Lily, Rose & Sandalwood.

AWL has spent heavily during the year on advertising and promotion last year and come up with new commercials featuring its brand ambassador Akshay Kumar. The company also went a step ahead and chose Indian Railways as a medium for branding. It hired 10 locomotive engines which will be used for superfast trains and travel on routes across the country.

In order to spread awareness about the hazards of plastic, AWL organised a Plogging event – ‘Reuse or Refuse Plastic’ in which all its employees located at Head Office participated in great strength and made the event successful. Nearly, 400 employees participated in this event on 7th December, 2019. The drive went on for 21 days and around 700 kg plastic was collected cumulatively from the 3 km area around its office.

Project SuPoshan, its fight against malnutrition and anemia is actively moving further and has added new sites Vidisha in Madhya Pradesh & Katupally in Tamil Nadu. The project has also implemented village extensions in Raigrah and Godda in Chhattisgarh. Today, the project has 634 Sanginis onboard who reaches out to almost 3.5 lakh households.

AWL has been recognised as great place to work by the Great Place to Work Institute. It has also been conferred with the Dainik Jagran CSR Awards, Globoil Megastar of the year award and manufacturing excellence achievement using Six Sigma. AWL has also been awarded the Globoil Award for highest exporter of castor seed extractions and highest exporter of rapeseed extraction.

Adani Agri Fresh Limited

Adani Agri Fresh Limited (AAFL), a wholly owned subsidiary of the company has pioneered the establishment of integrated storage, handling and transportation infrastructure for Apple in Himachal Pradesh. It has set up modern Controlled Atmosphere storage facilities at three locations, Rewali, Sainj, and Rohru in Shimla District. The Company has also set up a marketing network in major towns across India to cater to the needs of wholesale, retail and organised retail chain stores. The Company which is marketing Indian fruits under the brand name FARM-PIK, has expanded its footprint in the branded fruit segment. The Company also imports Apple, Pear, Kiwi, Orange, Grapes etc. from various countries for sale in India.

The production of apple during the financial year 2019-20 was better than the previous year though there were many production areas impacted by the hailstorm in Himachal Pradesh. There was rainfall during last part of September which affected the quality of the fruit towards the fag of the season. Hence, the availability of good quality apples for CA storage got reduced towards the end. This resulted in the company procuring less than its target. The company also took decision to hedge its risk by not procuring fruits having quality issues.

On the other hand, apple production in Washington State and European countries was less than the previous year. The ban on importing apples from China is further extended to the current year as well. The duty on apples from USA had also increased to 70% as against 50% in previous years. The CA storage capacity has increased manifold in Shimla, Kashmir, Punjab and Delhi NCR region. Though there was solace due to reduced imports from other countries, but the competition from the domestic CA operators became intense. The company could able to procure apples at reduced rate in comparison to the previous year by H10/kg but the realisation was lower than the previous year due to higher supplies of CA/ CS stocks from Kashmir region in early part of selling period. The impact of COVID-19 in the month of March 2020 was severe and affected thee company’s target and profitability.

During FY 2018-19, the Company bought 19314 MT of Indian apple valued H 79 crore and Imported 3159 MT of various fruits, valued at H 35 crore. The Company sold 17076 MT of domestic apples and 3159 MT of imported fruits total valued at H 178 crore.

Financial Highlights

May 6 2020, Adani Enterprises Ltd announced its results for the fourth quarter ended March 31, 2020.¹⁴

Consolidated Total Income for the FY20 increased by 8% to Rs. 44,086 crores vs Rs. 40,951 crores in FY19. The EBIDTA for the FY20 increased by 17% to Rs. 2,968 crores vs Rs. 2,541 crores in FY19. The PAT attributable to owners for FY20 rose 59% to Rs. 1,138 crores vs Rs.717 crores in FY19

Consolidated Total Income for the quarter increased by 2% to Rs. 13,698 crores vs Rs. 13,473 crores for the corresponding quarter in the previous year. The EBIDTA for the quarter remained at Rs. 647 crores vs Rs. 943 crores in Q4 FY 19. The PAT attributable to owners for Q4 FY 20 was Rs. 61 crores vs Rs. 283 crores in Q4 FY 19.

“Adani Enterprises Limited has always strived towards nation building, through its business endeavours which focuses on creating excellent infrastructure capabilities to accelerate the growth. With the COVID-19 pandemic has brought things to a halt, the company at Adani will persistently support its fellow Indians through these testing times. The company aim to emerge stronger once situations normalize. The emphasis will be on continued incubation of future businesses and create value for its stakeholders in the long term.” said Mr. Gautam Adani, Chairman Adani Group.

Business Highlights:

Mining Services

In Mining Services business, production volume at Parsa Kente coal mine in Chhattisgarh stood at 4.53 MMT vs 4.92 MMT in Q4 FY 19. Recently, the coal production has started at Gare Pelma III mine in Chhattisgarh and the volume during the quarter is 0.45 MMT.

Solar Manufacturing

The company has established India’s largest solar cell and module manufacturing unit in Mundra SEZ. The plant has an installed capacity of 1.2 GW fully integrated cell and module manufacturing unit. Q4 FY 20 volume was at 193 MW modules vs 260 MW modules in Q4 FY 19.

Agro

In food business, the company has maintained its leadership position with its “Fortune” brand and continues to lead the refined edible oil market with more than 20% market share.

Roads

The company has signed three concession agreements with NHAI under Hybrid Annuity Model for construction of roads aggregating to 150+ KMs, with project completion status of 40% in Bilaspur-Pathrapali project at Chhattisgarh. It has also received two letters of award from NHAI for construction of roads aggregating to 60+ KMs in the state of Andhra Pradesh and Madhya Pradesh.

Airport Services

The company has won bids for six airports at Ahmedabad, Mangalore, Lucknow, Trivandrum, Jaipur and Guwahati, out of which concession agreements have been signed for Ahmedabad, Mangalore and Lucknow.

Recent developments

Adani Enterpris Consolidated December 2020 Net Sales at Rs 11,620.45 crore, up 6.14% Y-o-Y ¹⁵

February 05, 2021; Reported Consolidated quarterly numbers for Adani Enterprises are:

Net Sales at Rs 11,620.45 crore in December 2020 up 6.14% from Rs. 10,948.17 crore in December 2019.
Quarterly Net Profit at Rs. 296.81 crore in December 2020 down 30.37% from Rs. 426.26 crore in December 2019.
EBITDA stands at Rs. 939.34 crore in December 2020 up 6.2% from Rs. 884.46 crore in December 2019.
Adani Enterpris EPS has decreased to Rs. 2.70 in December 2020 from Rs. 3.88 in December 2019.

Adani Airports acquires 23.5% stake in Mumbai International Airport for Rs 1,685 crore. ¹⁶

February 07, 2021; Adani Airport Holdings (AAHL), a wholly owned subsidiary of Adani Enterprises, has acquired 23.5 percent stake in Mumbai International Airport (MIAL) from ACSA Global (ACSA) and Bid Services Division (Mauritius), or Bidvest, for Rs 1,685.25 crore, the company informed exchanges on February 7.

AAHL, the Adani Group’s holding company for its airports business, bought 28,20,00,000 equity shares in MIAL, it said in the regulatory filing.

AAHL said this acquisition forms part of the transaction pursuant to which it proposes to acquire controlling interest in MIAL as specified in their intimation dated August 31, 2020.

Adani Group to acquire GVK ADL debt, other investors’ stake for controlling interest in Mumbai airport

"In continuation of our earlier intimation dated 31st August, 2020, we would like to inform that AAHL has acquired 23.5 percent equity stake i.e. 28,20,00,000 equity shares of Rs 10 of MIAL from ACSA and Bidvest," AAHL said.

Earlier in September 2020, AAHL said it was going to acquire a controlling stake in MIAL, following which it would also take on current owner GVK Airport Developers Ltd’s debt.

This new acquisition allows Adani Group to convert the acquired debt to equity of GVKADL on mutually agreed terms, subject to obtaining necessary regulatory approvals.

Together - Bidvest and Airports Company of South Africa - held 23.5 percent stake in MIAL. While GVK ADL is the holding company through which GVK Group holds 50.50 percent equity stake in MIAL and holds 74 percent equity stake in Navi Mumbai International Airport Ltd (NMIAL).

MIAL, which manages the Mumbai International Airport, will operate the upcoming Navi Mumbai International Airport as well. Recently, Adani Group had received permission to operate Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangaluru airports through the public-private partnership (PPP) model.

References

Tags: IN:ADANIENT

Created by Asif Farooqui on 2020/07/06 08:02