Adani Enterprises Ltd., the flagship of billionaire Gautam Adani, will invest approximately $1.5 billion in its burgeoning data center business over the next three years, as the Indian conglomerate's growth emphasis returns following a short seller campaign that left it in months of damage control.
According to a filing late Wednesday by Jugeshinder Singh, Adani Enterprises' chief financial officer, AdaniConnex Pvt. - a joint venture with global data center provider EdgeConnex Inc. - the annual capital expenditure on the data center business, AdaniConnex Pvt. - is expected to be around $500 million this year and the next two years.
The company intends to construct nine data centers with a total capacity of one gigatonne by 2030. This will offer infrastructure for the rising demand for digital services in the country of 1.4 billion people, which has already enticed the world's largest corporations such as Amazon.com Inc and Google.
According to a Nov. 2 investor presentation, AdaniConnex, which has only one operating data center in Chennai so far, has finished about two-thirds of the construction in the Noida and Hyderabad facilities. Adani's $70 billion pledge now includes the most environmentally friendly data centers. The second phase of development in Chennai is also ongoing, while land acquisition is happening in Hyderabad and Navi Mumbai. In June, the joint venture firm raised $213 million in debt.
Group’s Incubator
The data center unit is one of Adani Enterprises', the group's incubator, newest enterprises. It reported disappointing earnings this month as income from its main coal trading business fell while revenue from newer operations increased.
The CFO's latest capital spending projection suggests faster growth at the ports-to-power business, which has spent much of this year recovering from Hindenburg Research's bombshell charges of corporate wrongdoing in January. Last quarter, Singh predicted a little lower expenditure for data centers. The Adani Group, which had been on a rapid expansion until the short seller swipe threw it into turmoil, has consistently refuted Hindenburg's allegations.
The Adani Group has gained steam in recent months, with GQG Partners investing in numerous Adani companies and banks agreeing to a $3.5 billion refinancing arrangement. The US government's development financing agency approved $553 million in funding for the conglomerate's port project in Sri Lanka this week, marking the latest endorsement for the company.
