ADANI ENTERPRISES FPO

Adani Enterprises Limited is a part of the Adani group, which is among India’s top business houses with an integrated energy and infrastructure platform in India and a long track record of successfully executing large-scale projects. It is one of India’s largest listed business incubators in terms of market capitalization and are driven by the philosophy of incubating businesses in four core industry sectors - energy and utility, transportation and logistics, consumer, and primary industry. It has, over the years, seeded new business interests for the Adani group, developed them into sizeable and self-sustaining business verticals and subsequently demerged them into independently listed and scalable platforms, thereby unlocking value for its shareholders. The company has a demonstrated track record of creating sustainable infrastructure businesses since 1993. Its current business portfolio includes:

1.Energy and utility:The company is setting up a green hydrogen ecosystem with an objective to incubate, build and develop an end-to-end integrated ecosystem for the manufacture of green hydrogen, which includes manufacturing renewable energy equipment such as wind and solar modules to reduce the cost of renewable power, to the production of renewable energy and green hydrogen itself, and transformation of a part of the green hydrogen produced into derivatives, including green nitrogenous fertilizers, ammonia and urea, both for the domestic market and exports.

2.Transport and logistics:As part of its airports business the company manages prominent airports in India. It currently develops, operates and manages seven operational airports across the cities of Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram, and one greenfield airport in Navi Mumbai.

3.Consumer:Adani Enterprises Limited manufactures, markets and brands food FMCG products. Additionally, it is developing a super-app, “Adani One”, as part of its digital business to complement Adani group’s consumer serving businesses.

4.Primary industry:The company offers mining services which involves contract mining, development, production-related services and other related services to mining customers primarily in the coal and iron ore industries.

5.Industrials:It intends to manufacture petrochemicals, copper and similar metals, and manufacture strategic military and defence products that enhance India’s self-reliance.

The offer comprises of FPO Equity Shares aggregating up to ₹20,000 crore. Out of the net proceeds, ₹10,869 crores would be used for Funding capital expenditure requirements of some its subsidiaries in relation to (a) certain projects of the green hydrogen ecosystem; (b) improvement works of certain existing airport facilities; and (c) construction of greenfield expressway. ₹4,165 crores would be used for repayment, in full or part, of certain borrowings of the company and three of its Subsidiaries, namely, Adani Airport Holdings Limited, Adani Road Transport Limited, and Mundra Solar Limited.

The company’s revenue from operation increased from ₹43,402.56 crores in FY20 to ₹69,420.18 crores in FY22 at a CAGR of 16.9%. The company’s EBITDA increased from ₹2,967.96 crores in FY20 to ₹4,725.71 crores in FY22 at a CAGR of 16.8% while PAT has decreased from ₹1,138.17 crores in FY20 to ₹776.56 crores in FY22.

Adani Enterprises Limited is one of India’s largest listed business incubators in terms of market capitalisation. It represents an effective complement of established and developing businesses which address the needs of India. The company started operations in 1993 and incubated the ports business in 1998, and have since expanded its portfolio to cover diversified businesses across many industry verticals including energy and utilities, transport and logistics, primary industry and consumer. The company has, over the years, seeded new business interests for the Adani group, developed them into sizeable and self-sustaining business verticals and subsequently demerged them into independently listed and scalable platforms, thereby unlocking value for its shareholders. It continues to add new companies to its portfolio with an objective to address the growing needs of India. These businesses possess a complement of scale, strategic importance, sustainable processes and technology sophistication.

Since its inception in 1993, Adani Enterprises Limited has incubated several companies across many verticals in the infrastructure sector and have built a distinctive specialization in project execution and have successfully executed all projects that it has undertaken to date. Through AEL, the company would focus on the underpenetrated infrastructure sector in India that it believes has high potential for growth. By leveraging the Adani group’s multi-decade pool of managerial experience across a range of competencies for executing projects, the company recognizes opportunities early, bid for or acquire projects, and aim to successfully execute projects. It develops and operate businesses with an aim for these businesses to lead in their respective sectors, offer customers a superior pricevalue proposition, widen markets, and contribute to the sustainable development of the nation. As a result, its businesses not only serve existing markets but are built and operated with an aim to enlarge markets, enhance lifestyles, further sustainability and foster prosperity.

IndiaIndia is expected to overtake the European Union as the world’s third largest energy consumer by 2030 and will account for nearly one quarter of the global energy demand growth over 2019 to 2040. However, dependence on conventional sources alone to meet this requirement will not only result in higher import expenses but also higher emissions. In 2016, India signed the Paris Agreement to reduce the emissions intensity of its GDP by 45% by 2030. In 2021, India set its target for decarbonisation through the “Panchamrit” (which means five nectar) outlined by India’s prime minister, Shree Narendra Modi, during his address at the UN Climate Change Conference, Glasgow (“COP 26 summit”), where he said that India is aiming to be net zero by 2070, for renewable power to constitute more than 50% of total power consumed by 2030, to reduce carbon intensity by 45% by 2030 (over 2005 levels), for non-fossil fuel capacity to be increased to 500 gigawatts (“GW”) by 2030 and to reduce India’s carbon emissions by one billion tonnes by 2030. Further, at UN Climate Change Conference, Egypt (“COP 27 summit”), India submitted its long-term low emission development strategy to the United Nations Framework Convention on Climate Change in which the importance of hydrogen along with electric vehicles and ethanol for achieving decarbonisation was emphasized. Under the National Green Hydrogen Mission approved by the Union Cabinet in January 2023, India has set a target of manufacturing 5 million metric tonnes (“MMT”) of green hydrogen per annum by 2030 with an associated renewable energy capacity addition of about 125 GW, and related development of renewable energy capacity, cutting approximately 50 MMT of annual greenhouse gas emissions. Tapping on this potential and to further its and India’s sustainable growth, Adani Enterprises Limited is setting up a fully-integrated green hydrogen ecosystem in India under its subsidiary ANIL with an objective to incubate, build and develop an end-to-end integrated ecosystem for the manufacture of green hydrogen. Its green hydrogen ecosystem covers (i) the manufacture of equipment required for the manufacture of renewable power and green hydrogen, (ii) the manufacture of green hydrogen and the renewable power required for it, and (iii) the manufacture of downstream products. Currently, it has a solar and wind equipment manufacturing facility at Mundra SEZ. It commissioned India’s largest vertically integrated solar Photovoltaic (“PV”) facility as of September 30, 2022 and had the largest market share of 28% in terms of installed capacity for PV cell manufacturing. The company offers products and services across the PV spectrum and manufacture passivated emitter and rear cell (“mono-p- pERC”) and passivated emitter rear totally diffused (“n-PERT”) bifacial cells besides the multi- metal catalysed chemical etching (“MCCE”) wafer-to-cell on a commercial scale. Its solar manufacturing facility, currently covers the manufacture of cells, modules and ancillary products, has an installed capacity of 3.5 GW per annum (including 2 GW per annum monocrystalline capacity and 1.5 GW per annum of multi-crystalline technology, which is planned to be replaced with tunnel oxide passivated contact or TOPCon).

Adani Enterprises Limited’s airports are located in regions which experienced rapid economic growth in recent years. All its airports are city center airports mostly in the capital cities of the prominent states India. The GDP at constant prices of the states of Gujarat, Karnataka, Uttar Pradesh, Rajasthan, Assam, Kerala, and Maharashtra where its airports are located grew at a CAGR of approximately 9.24%, 8.26%, 5.09%, 5.36% 6.02%, 4.42%, and 4.98% during Fiscals 2012 to 2020, partially as a result of a series of economy, stimulating initiatives supported by the local state governments. The expansion of India’s population and middle class, low air trips per capita than other developing nations, improving aviation ecosystem in India, a land mass that is the world’s seventh largest, India’s ideal geographical location between the eastern and western hemisphere, aspiration to travel on leisure, narrowing price differential between air tickets and railway airconditioned second tier tickets, coupled with increased disposable incomes due to an expanding economy are expected to propel growth in the aviation sector. Tapping on this opportunity, the company won mandates to modernize and operate six airports in Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram through the Airports Authority of India’s (“AAI”) globally competitive tendering process. The company acquired the Mumbai International Airport Limited in 2021, and thereby won the contract for Navi Mumbai International Airport. As of December 31, 2022, its portfolio comprises seven operational airports and one greenfield airport. It has emerged as the largest private operator of airports based on number of airports.The long-term sustainability of its businesses is built on the foundation of delivering sustained value for its stakeholders. Adani Enterprises Limited’s journey of value-creation for all its businesses rests on an integrated approach of taking into account ESG principles. It reflects enhanced financial capital, manufactured capital, human capital, intellectual capital, social and relationship capital and natural capital.

Environment:The Adani group’s portfolio companies have been set up with an aim to build sustainable businesses in line with India’s decarbonisation agenda and has set up a green infrastructure with integrated ports, renewable power generation and sustainable power and gas transmission infrastructure.

Social:It has formulated a robust corporate social responsibility (“CSR”) Policy which encompasses its philosophy and guides the company’s sustained efforts for undertaking and supporting socially useful programmes for the welfare and sustainable development of the society.

Governance:The company has instituted various corporate governance policies and committees including its Corporate Responsibility Committee (“CRC”) consisting solely of independent directors tasked with keeping the Board of Directors informed about the ESG performance of businesses.

Integrated resource management is one of Adani Enterprises Limited’s core current business activities. It is one of the leading suppliers of imported coal in India with 64.4 MMT of coal volumes sold during Fiscal 2022. As part of integrated resource management business the company provides customers with a one-stop-shop for their energy needs by managing the entire supply chain of services from sourcing of coal, managing the finances for the voyage time, providing port handling services, managing inland transportation of coal and delivery of the coal at customers’ doorstep. It has a diversified trading portfolio with storage facilities at both outbound and inbound ports along with the requisite infrastructure to efficiently manage sea borne and inland multi-modal logistics movement. Adani Enterprises Limited’s competitive advantage is derived from the synergies between Adani group’s various business verticals, including the ports terminals on both the east and west coasts of India, which provide a strong infrastructure for efficient logistics management. Further, its experience spanning several decades in handling commodity trading and its long standing business relationship with the coal suppliers in Indonesia, Australia and South Africa further provides the relevant purchasing power to manage such large coal volumes at a competitive price.

• a.If it is not able to successfully manage its growth, its business and results of operations may be adversely affected.

• b. The company’s integrated resource management business primarily depends on an increasing demand for imported coal in India and its ability to maintain a diverse supplier base. Failure by its suppliers to continue to supply the company with coal on commercially reasonable terms, or at all, would put pressure on its operating margins and have a material adverse effect on its financial condition.

• c.Its airport operations and the fees charged for aeronautical services are regulated by the Government of India and the terms of its concession agreements. Accordingly, government regulations and the terms of its concession agreements (including with respect to the determination of tariffs for its aeronautical services) have materially affected, and will continue to materially affect, its results of operations.

• d.The company’s revenue from its airports business depends on levels of air traffic, which in turn depend in part on factors beyond its control, including economic and political conditions and the regulatory environment.

• e.Any failure to execute on its green hydrogen strategy could have an adverse impact on its operations.

• f.The company faces a variety of risks in connection with its reliance on concessions and other contracts where the counterparties are central and state government companies.

Adani Enterprises Limited intends to set up a fully integrated green hydrogen ecosystem in India to enable access to low-cost renewable power and produce low cost green hydrogen at scale, and manufacture downstream products. The company intends to invest approximately up to US$50 billion over the next 10 years in the green hydrogen ecosystem for production of up to 3 MMT of green hydrogen. In the initial phase, the company plans to develop green hydrogen production capacity of up to 1 MMT. For that, it plans to be fully backward integrated in solar module manufacturing to achieve supply assurance and cost efficiencies. The company plans to expand its solar module manufacturing capabilities at Mundra SEZ to up to 10 GW per annum and cover the manufacture of metallurgical grade (“mg”) silicon, poly silicon, ingots, wafers, cells and the module itself. It intends to develop ecosystem of critical ancillary producers for manufacturing modules in- house, such as, ethylene vinyl acetate (“EVAs”), back sheet, frames, glass, junction box, sealant, potting material, inter connectors and copper, among others using high efficiency technologies. For its wind energy equipment, the company intends to operationalize its wind turbine in phases and reach a wind turbine manufacturing capacity of up to 3 GW per annum. To ensure uninterrupted supply of component parts for its wind turbine, the company plans to enter into long-term agreements with multiple suppliers, enter into joint development agreements with vendors where feasible, and in time move majority of the manufacturing processes in house. It also intends to set up a fully integrated electrolyser manufacturing facility with an aggregate installed capacity of up to 15 GW per annum in western Gujarat and Rajasthan close to the Mundra SEZ facility. Adani Enterprises Limited intends generate low cost hydrogen by making available renewable power at low cost. For that it intends to set up hybrid wind and solar renewable power plants using equipment manufactured in-house and at the same facility as the electrolyser in western Gujarat and Rajasthan, which have highest solar radiation levels and therefore has the potential to become one the lowest cost green hydrogen producing regions. Adani Enterprises Limited intends to develop the electrolyser in-house at Mundra SEZ based on latest technologies, including the alkaline water electrolysis, proton exchange membrane and anion exchange membrane technologies, to ensure its efficient operation.

Adani Enterprises Limited’s airports portfolio comprises seven operational airports, an effective platform to build a network effect for new routes. The company intends to re-define India’s airports infrastructure sector through gateway development, regional footprint growth, focus on consumers and non-passengers and a deeper investment in digital technology interventions that widen consumer choice and delight. It intends to continue leveraging the Adani group’s existing businesses to develop world-class renewable energy infrastructure that helps moderate the carbon footprint of its airports. The company plan to accelerate digital investments leading to “Pranaam” services, passenger self-service solutions, centralized airport control center, airport operations system, customer relationship management, real-time airport community monitoring and management system with functions such as queue and flow management, bio-metric identification, tracking and analytics, AI and digital assistance and technology-oriented services, such as virtual shopping screens, robotics powered porter service or navigation support, virtual food ordering services and smart fitness centers). It also intends to deliver a contactless end-to-end travel experience using advanced technologies such as facial recognition, self-baggage drops and self-boarding gates, apply 5G technology, provide digitized advertising channels, such as 3D holographic projections and interactive games.

Adani Enterprises Limited expects to generate revenue from the commercial development of property surrounding airports of approximately 650 acres. With this sizable retail space and land bank, and increasing consumer purchasing power in India, it believes there is a significant opportunity to increase non-aeronautical operations revenue per passenger. The company expects to develop the land in a phased manner to cover hotels, retail establishments and office space such that its airports act as a “The Destination Magnet” for customers, along with convenience offered through a super-app. The company intends to continue developing its airports to meet high standards of ESG principles and backed by technology and innovation. The company also intends to continually develop its airports to create a positive and conducive environment for brands to use its airports and increase exposure by optimizing inside-airport passenger movements. Adani Enterprises Limited plans to enhance and re-work the layout of the existing commercial area at the airports and channel passenger footfall in the desired direction. Its aim is to build and operate the high yielding key businesses at the airports, e.g., duty free, advertising, ground transportation and parking, lounges, fuel farm and cargo handling. The company intends to continue to attract and retain airlines flying out high valued passengers by developing key routes and offering attractive and peak hour slots. Its aim is to continue engaging with all passenger segments by developing the right shopping and relaxing environment, the right lay-outs, the right flows and product categories and brands to suit their needs and requirements. The company plans to deploy special focus on the development of non-passenger areas which will not only attract city dwellers but also offer the right entertainment for meters and greeters.

Adani Enterprises Limited roads portfolio includes the right to develop, build, finance, operate and toll the 2,785 lane kms greenfield Ganga Expressway project in Uttar Pradesh with a concession period of 30 years. The Ganga Expressway in Uttar Pradesh will connect Meerut with Prayagraj. Of its 594 km length, it will build 464 km (approximately 2,785 lane kms) of road from Budaun to Prayagraj, which will comprise 80% of the expressway project. In August 2022, its subsidiary, Adani Roads Transport Limited, entered into a definitive agreement with equity infrastructure funds managed by Macquarie Asia Infrastructure Fund for acquiring four stretches of toll road assets – two each in the states of Andhra Pradesh and Gujarat. Adani group’s presence across India provides it with valuable data enabling it to evaluate and bid for strategic road assets. The company intend to continue maintaining a comprehensive mix of road assets as it continues to its journey towards building portfolio of 12,000 lane kms of road assets. The company will continue to evaluate and bid for attractive opportunities in the road, rail and metro transportation sector.

Adani Enterprises Limited roads portfolio includes the right to develop, build, finance, operate and toll the 2,785 lane kms greenfield Ganga Expressway project in Uttar Pradesh with a concession period of 30 years. The Ganga Expressway in Uttar Pradesh will connect Meerut with Prayagraj. Of its 594 km length, it will build 464 km (approximately 2,785 lane kms) of road from Budaun to Prayagraj, which will comprise 80% of the expressway project. In August 2022, its subsidiary, Adani Roads Transport Limited, entered into a definitive agreement with equity infrastructure funds managed by Macquarie Asia Infrastructure Fund for acquiring four stretches of toll road assets – two each in the states of Andhra Pradesh and Gujarat. Adani group’s presence across India provides it with valuable data enabling it to evaluate and bid for strategic road assets. The company intend to continue maintaining a comprehensive mix of road assets as it continues to its journey towards building portfolio of 12,000 lane kms of road assets. The company will continue to evaluate and bid for attractive opportunities in the road, rail and metro transportation sector.

As part of its digital business, Adani Enterprises Limited intends to digitalize Adani group’s consumer-facing portfolio to meet customer needs with improved customer engagement, increased monetization and a faster time-to-market. The company intends to develop an integrated Adani platform or super app (called Adani One App) to provide a seamless experience to customers of various Adani group’s businesses. It plans to achieve this with support from partners and concessionaires across its business verticals. The company has deployed this super app first in the airports business to enhance airport travel experience by combining solutions to all the key service needs of passengers under a single app. Customers will be able to book flights, check real-time flight status, book taxis, avail the Pranaam service, book lounge access, shop at airport duty-free and avail other services through a single app. Over time, it expects to cover other consumer facing businesses of the Adani group, such as electricity distribution, city gas distribution, FMCG, among others.

Adani Enterprises Limited intends to pursue strategic alliances to enhance its capabilities, address specific industry opportunities, develop its technical expertise and price its products and services more competitively. For example, the company intends to form a strategic alliance to develop an end-to-end health infrastructure business covering diagnostics, hospitals, health insurance, among others. It has demonstrated the capacity to operate joint ventures with partners in the data centers, agro-products, FMCG and mining services, among others. Some of the key strategic alliances it has entered into are (i) partnership with Total Energies, through its subsidiary ANIL for the production and commercialization of green hydrogen in India, (ii) partnership with EdgeConneX, to build reliable data center networks, and (iii) partnership with Wilmar International to form Adani Wilmar Limited, a FMCG company in India. The company believes that it possesses a culture of specialisation in projects execution, one of the most challenging segments in India, marked by the ability to execute projects faster than the sectorial average by drawing on a validated Group level managerial experience.

High level of imports is typically unsustainable owing to ever-changing geopolitical circumstances and possibility of dumping by various nations, therefore impressing on the need for ramping domestic production. To this end, it will leverage the Adani group’s resources at Mundra SEZ to build a state-of-the-art petrochemicals industry to enhance PVC import substitution. The company believes that there is a growing opportunity to consume green fuels and moderate national carbon footprint. Accordingly, Adani Enterprises Limited intends to build and operationalize the first phase of the PVC project of up to 2 Million Metric Ton Per Annum (“MMTPA”), leveraging group resources and the Mundra SEZ’s locational advantage with a project size. Its vision is to emerge as a globally aligned copper business committed to building India and enhance value for stakeholders through trust and courage. Copper is a key raw material linked to the Adani group’s infrastructure portfolio (energy and transportation), which it believes strengthens national self-reliance and securing its supply chain. The company will manufacture copper and by-products, precious metals (gold and silver) and sulphuric acid, which can be partly converted to phosphoric acid. It may also explore value-added downstream opportunities like copper tubes.

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