Adani to exit realty, focus on core biz

Adani Enterprises has decided to exit the real estate business.

The Rs45,000 crore power, port and mining company on Thursday said it will divest its entire holding in subsidiary Adani Infrastructure Development Pvt Ltd (AIDPL).

“The board members had demanded the exit of Adani Enterprises from real estate business. The core business of Adani Enterprises includes power, port and mining. In coming years, the three verticals will see huge turnovers, while real estate will be minuscule. So we decided to divest from the business,” Devang Desai, executive director of Adani Enterprises and chief financial officer, Adani Group, said after announcing the third quarter results.

The group is considering all possible options for the exit. “We could sell it completely to a third party or go in for a joint venture, or demerge it into a separate entity,” said Desai.

AIDPL is developing 40 million sq ft of residential and commercial space, including a township in Ahmedabad, spread over 616 acre and involving a cost outlay of Rs5,000 crore.

Adani Enterprises hopes to raise at least Rs2,000 crore through the divestment.

For the quarter ended December, Adani Enterprises reported a 14.2% decline in net profit at Rs407.28 crore as net sales ran up 60.2% to Rs9,037.98 crore.

“Overall profitability has been impacted largely due to losses on account of foreign exchange fluctuations amounting to Rs536 crore in the quarter,” Desai said, adding, “We are expecting that we will gain in the fourth quarter as the currency has already appreciated from 53 to around 49 against the dollar.”

Meanwhile, Adani Group has bid for BG India’s stake in Gujarat Gas. “Right now, city gas distribution contributes very little to the total turnover of Adani Enterprises. If we win, the business could grow multifold in coming years,” said Desai.