Why Gautam Adani is on a buying spree

Acquisitions to help build new airports, roads, Dharavi projects...

The billionaire Adani family, which is building an in-house construction and engineering ecosystem by acquiring ITD Cementation and PSP Projects, is actively seeking additional acquisition opportunities, according to bankers.

As part of its $100 billion investment plan by 2030, the Ahmedabad-based group has undertaken several large-scale construction projects, including the Dharavi redevelopment, Ganga Expressway, a mega convention centre in Mumbai and airports.

These projects demand in-house engineering and construction expertise, hence the group has made recent acquisitions including ITD Cementation and PSP Projects.

The group may look for other opportunities by the family office, say bankers.

Officials of Adani Enterprises, which is investing Rs 67,000 crore in the ongoing financial year as capital expenditure, had said the acquisitions are to build in-house capability.

“Adani Infra (India), which is our construction arm, is buying ITD Cementation because they need to develop their construction ecosystem given our capex rise.

"And because they provide construction assurance to various group companies, they are continuing to enhance their ecosystem and build their capability,” Jugeshinder (‘Robbie’) Singh, the CFO of Adani Group, told analysts after the September quarter results while referring to ITD Cementation acquisition.

In October, the Adani Group’s Renew Exim DMCC, a Dubai-based private entity, had acquired 46.64 per cent stake in engineering and construction firm ITD Cementation India from its promoters at a total consideration of Rs 3,204 crore.

This acquisition was within days of group firm Ambuja Cements acquisition of 47 per cent stake in Orient Cement from the CK Birla group at an equity valuation of Rs 8,100 crore.

These transactions are a win-win deal for both parties. Officials from PSP Projects said with Adani’s acquisition, they expect their order book to grow from the current Rs 6,500 crore, as Adani portfolio companies are undertaking several projects in defence, airports, and infrastructure.

PSP Projects will be in the race to construct Adani Group’s industrial projects in Kandla and new buildings in Dharavi, Mumbai, company officials said in an analysts’ call on Wednesday.

The Adani Group did not comment on the PSP Projects acquisition on Wednesday.