Adani group to hive of green hydrogen, data center business

The Adani group, led by Gautam Adani, plans to spin off some of its new-age businesses like green hydrogen, airports and data centres between 2025 and 2028. According to the CFO, this would be done after the businesses achieve a certain scale, profitability and investment profile. Currently, all these businesses are housed under Adani Enterprises Ltd (AEL), which incubates new age businesses for the Adani group. 

Adani group has massive investment plans and for that AEL is doing an FPO of Rs 20,000 crore in this week. It may be recollected that businesses like ports, power and city gas were incubated in AEL before being spun off as listed entities.

Adani group is yet to decide which businesses would be hived off, but the most likely businesses to take IPO route would be green hydrogen, logistics, airports and data centres. Most of these new-age businesses are expected to acquire a full-fledged investment profile between 2025 and 2028. This demerger will also bring down the debt/equity ratio of these companies and address the issue of excess debt; first flagged by CreditSights of the Fitch group.

Gautam Adani is known to make big brave bets and, in the past, his big bets on ports, airports, green energy and the FMCG business have paid off. Adani recently forayed into cement by taking a controlling stake in Ambuja and ACC to emerge as the second largest cement player in India after Ultratech. For the future, Adani is betting big on logistics, green hydrogen and data centres. The slew of IPOs between 2025 and 2028 will also address the issue of stock market free float, apart from debt levels. The success of the FPO this week will be a litmus test.