Adani Enterprises to freeze capital expenditure in new road projects

It will focus instead on completing existing ones, before committing fresh investments

Adani Enterprises plans to freeze investments in new road projects till the current volatility around its share price, sparked by a report by US-based short seller Hindenburg Research, ends. 

Instead, the company plans to complete the existing portfolio of road projects like the Ganga Expressway before committing any fresh capital expenditure, group officials said.

A large number of road projects are awarded in the March quarter as government agencies rush to meet their year-end deadlines. Infrastructure companies participate in the auction for the next financial year. Company officials said most of the ongoing road projects were on schedule and there was no change in the commissioning dates.

“We want the current volatility to settle down before we make any new commitments (on capex) and we don’t want our investor community to suffer due to the volatility,” company officials told analysts on Wednesday.

The company had won the auction to build the 464-km Meerut to Prayagraj stretch of the Ganga Expressway in Uttar Pradesh. Adani Road, a subsidiary of AEL, secured a debt of Rs 10,238 crore within nine months of winning the contract and made a capital infusion of Rs 6,826 crore. The company would build three stretches of the expressway, which would cost Rs 23,000 crore.

The company said its portfolio consists of 14 projects with construction and maintenance of roads of 5,000 plus lane km and its under construction projects were on track. Last year, the company had acquired four toll roads in Gujarat and Andhra Pradesh from Macquarie Asia Infrastructure Fund for Rs 3,110 crore.

In the Union Budget, presented by the finance minister on February 1, the Centre increased the allocation to the National Highways Authority of India (NHAI) to Rs 1.62 trillion for FY24 from last year’s revised allocation of Rs 1.42 trillion.