Adani Enterprises Ltd Investor Presentation
September 2019 Contents
1 Introduction to Adani Group and Adani Enterprises
2 Company Profile
Core Businesses 3 • Mining & Services • ICM Incubating Businesses - Infrastructure & Utilities • Airports 4 • Roads • Water Strategic Investments • Mundra Solar PV 5 • Food & FMCG • Defence
2 Adani : a World Class Infrastructure & Utility Platform
Transport & Logistics Portfolio Utility & Power Portfolio Adani 62.3% 100% 100% 75% 75% 75% 75%
APSEZ AAPT SRPCL ATL APL AGEL AGL Port & Logistics Port Rail T&D IPP Renewables Gas DisCom 75%
AEL Incubator 100% 100% 100% 100%
AAHL ATrL AWL Data Airports Roads Water Centre Market Cap* ~USD 25 Bn
. No 1 in Ports, T&D and IPP (Thermal and renewables) in India
. Independent verticals with independent boards - Integrating ESG into value creation Adani . Addressable utility market- 3.2 million customers in ATL & ~ 10 million in AGL
. Addressable market in Airports ~125 million customers
* Market Cap as on 30-Sep-19 3 Adani : Track Record of Delivering World Class Assets
Leveraging Core Strengths… …to Deliver World Class Assets Large Scale Businesses Delivering Consistent Growth 648 MW Ultra Mega Solar Mundra Port: India’s Largest Commercial Port Power Plant Mundra-Mohindergarh 1,980 Ckt Km: Longest Private Asian HVDC Mundra 4,620 MW: Largest Single Location Private Thermal Power Station in India 648 MW, Tamil Nadu: India’s Largest Single Location Solar Power Plant Unmatched Execution Capabilities – Timely and Cost Effective India’s Largest Commercial Port 9 Months: Time for 648 MW Mega Solar Project Construction & Commissioning <2 days: Turn Around Time at Ports Amongst Best in World Amongst lowest Capex / MW Amongst Thermal Power Peers in India Strong Operational Efficiencies Largest Private Thermal Power 60%+: Highest EBITDA margin Among Port Peers Globally Station in India 99%+ Availability: Highest Operational Efficiencies in Power Transmission 5%: Lowest Operation & Maintenance Costs in Solar Power Generation Growing M&A Capabilities Longest Private HDVC Line Dhamra: From Loss in 2014 to 65% EBIDTA Margin in India Mumbai Distribution: Recently acquired; integration underway Udupi: From Loss to Profit of Rs 161 Cr in FY16; CUF from 61% to 77% in FY16
4 AEL 2.0 - Tested incubation model poised for growth beyond 2020
AEL Business Portfolio
Resources Transport & Logistics Utility Others
Integrated Coal Rail / Mining Airports Roads Water Data Centre Strategic Investments Management Metro
Embarked up on 2nd phase of infrastructure creation in AEL • India’s largest integrated coal management (volume 67MMT • won bids for 6 airports • Solar Manufacturing in FY19) • developing 3 HAM Road projects • Agro • Largest coal MDO operator • undertaking 1 water HAM project • Defence • Mining in Indonesia & Australia • setting up 1 GW of Data Centre capacity
5 Adani Enterprises: a Diversified Incubator Adani Enterprises (AEL) - History
2019: Forayed in to Airports, Roads, Water & Data Centre businesses
2018: Demerger & Listing of Adani Green Energy & Adani Gas
2015: Demerger & Listing of APSEZ, APL & ATL
2008 Awarded Bunyu Coal Mine Indonesia 2017 Solar Mfg plant commissioned
2006 2009-10 • Awarded India’s 1st MDO • APL & ATL started • Stock Split: 10:1 • QIP of $ 850 Mn • Carmichael Coal Mine acquired 1999 2007 • Coal ICM Commenced Grain Silo started at 7 locations • Signed JV with Wilmar • Bonus Issue of 1 : 1 2001 Adani Gas started
1995-96 Nov-1994 listed Adani Ports started @ Rs 150/share Bonus Issue 1 : 1 Subscribed 25x
7 AEL - Value Creation
Value Creation since 2015 Value Creation in 2018-19
1250 319
229 129 119
618 44 519 28 584 60 112
420 146 519 112 319 110 22-Jan-15 Post-Demerger Value as on 01-Apr-17 30-Sep-19 (03-Jun-15) 30-Sep-19 AEL Value AGEL Value AEL Value APSEZ Value APL Value ATL Value
₹ 150 30% CAGR ~₹ 100,000 in Nov 1994 in Sep 2019 8 AEL: A Successful Incubator
Begins with an assessment of identifying gaps and derived opportunities
New Business Assessment Process AEL provides the perfect commercialization plan to the new incubations by providing a seamless access to -
Mentoring / coaching / Access to materials / Executive Industry Company summary analysis description guidance to the new infrastructure / space and business team other such resources
Access to initial funding Introductions to advisors, while evaluating overall Product & domain expertise Marketing Market Financing plans Services strategy description description
Operations Staffing Financial Last but not the least – one of the most crucial description description projection assessment is of – Financing the new venture
As well as evaluating Assessment of sources of partners for equity financing outside financing – Debt Identifying Capital needs & & equity financing financing Milestones Funding alternatives 9 AEL: A Unique Investment Opportunity
Attractive sector dynamics - high growth latent demand, high entry barriers & policy initiatives
India centric strategy with market leadership - #1 Private Mining, Coal Logistics, Airport Operator & Edible Oil Brand
Project execution & operational expertise; Ongoing induction of professionals
Emphasis on long term, steady cash flow concessions / regulatory returns with minimum returns thresholds
Strategic partnership with select global players with long term focus
Robust credit & financial metrics, track record of successful incubation & value creation
10 Mine Developer & Operator (MDO) Integrated Coal Management (ICM) Global Coal Scenario: Demand to remain stable with geographic shift to Asia
India net imports, Australia net exports to be the highest Global coal demand to remain stable
-38 300 285 300 187 371 522 988 614 +40 -67 433 397 710 955 +95 +69 +21 1,914 1,841 1,552
-67 2015 2030 2040
-3 +130 China India OECD Other Emerging Asia RoW / Net exports/ imports in 2035 over 2017 levels
Demand to remain upbeat with growth in thermal power capacity India coal imports over the next 5 years expected to be range bound
227 227 224 225 225 220 Capacity Addition 1,117 240 1,050 988 886 930 897 852 825 763 706 625 659
204
FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY18 FY23 Total Demand Total Supply Imports India remain dependent on high GCV imported coal for blending in supercritical thermal power plants 12 Integrated Coal Management (ICM) - Our Global Footprint
Multi-Country Multi modal Customer Account Financing Procurement Logistics Management
ICM Integrated presence in complete supply chain with embedded technology provides sustainable Yamunagar competitive advantage Private Adani Power Overseas PSU Suratgarh Panipat Business Ltd business Hissar Harduaganj Dadri Tanda Vindyachal
Kota Unchahar Kahalgaon Badarpur Parichha Sagardighi Chhabra Rihand Dhamra Bakreshwar Bandel Kandla Panki Mejia Wanabori Durgapur Mundra Kolaghat Gandhinagar Sipat Bedi Navlakhi Korba [Talcher] Haldia Tarakan Tiroda Samarinda Tanjung Bara Dahej Koradi Bontang Paradip Hazira Chanderpur
Parli Ramagundam Vishakhaptnam Muara Satui Simhadri Tanjung Indonesia Kondapalli Gangavaram Pemancingan Kakinada
Goa Richard Bay Queensland South Africa Ennore North Chennai Mettur Tuticorin Australia
Ports Locations served Tuticorin
We are a team of 200+ with global operations run through 20+ India offices, 3 overseas offices 13 ICM – Market Leader with Consistent Operational Performance
Resilient Business Model with Consistent Market Leadership Sales Mix
In MMT FY 19 47% 56% 45% 41%
164 164 10% 147 145 SEBs 23% APL 67 MMT 78 81 Exports 66 67 61% Private/Others 6%
FY16 FY17 FY18 FY19 AEL ICM Volume India Steam Coal Import
Stable Operating Performance Realizations on an uptrend
in ₹ Crs. In $/ MT 27446 30232 29454 31763 66.6 67.3 55.8 967 998 1261 844 52.8
2.8 1.9 1.8 1.8
FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 Revenue EBIDTA EBIDTA per MT Realisation 14 India Coal Mining: Regulatory Evolution, Opportunities & Potential
• Allowed private sector participation in coal mining for captive usage Amendment to Coal Mines Nationalization Act (1973), 1991 • Case to case basis allotment of 218 coal blocks
• Additional regionally-explored (RE) coal blocks allocated to various PSUs - 14 for Power end use & 3 Auction by Competitive Bidding of Coal Mines Rules, 2012 for commercial mining
• Various complaints were received by the Govt. CAG Report, 2012 & SC Judgement in 2014 • Arbitrary and non transparent allotment led to cancellation of 204 coal blocks out of 218
• Re-Allocation of the coal blocks; 2- pronged strategy Coal Mines Special Provisions Act, 2015 • Auction for Private & Allocation for PSUs - either for captive or commercial use
• MoC has opened commercial mining for private sector under Act’ 2015 Way Forward • Methodology for auction published on Feb 27, 2018 and tender process expected soon
Captive Mines portfolio including CIL’s mines for potential MDO business
Category No. of Coal Blocks Category No. of Blocks Allocation & Auction 86 Category No. of Coal Blocks ~52 Bn Ton Allocation/Auction under Coal Mines Act 2015 204 To Allocate/ Auction 118 Pakri Barwadih, Tasra 2 Allocation under CMN Act 1973 14 Category No. of Coal Blocks ~7 Bn Ton UMPP Linked Block 12 Sub Total (Coal Blocks) 218 PSUs – Power; allocated 10
Allocation under Mining Rules 2012 17 PSUs- Power; cancelled 4 ~9 Bn Ton Category No. of Coal Blocks Commercial Mining 3 CIL Coal Block for MDO 3 Kaniha , Siarmal, Pelma 3 ~2 Bn Ton Grand Total 238 70 Bn Ton 15 MDO - Largest Mine Developer & Operator in India
MDO Business Order Book of 80 MMTPA A natural progression into Coal MDO
Successfully developed Power projects and Ports – Parsa East and Kanta Basan, Gained experience in LA, Peak Capacity 15 MMTPA Kushmunda Washery Community engagement, Peak Capacity – 10 MMTPA infra development – critical Kente Extension activities in Coal mining Peak Capacity – 7 MMTPA Mining in Indonesia since Presence in Coal Trading 2007- Credence to venture Parsa, business with PSUs, SEBs – Gidhpuri Paturia Peak Capacity – 5 MMTPA into Indian mining industry Peak Capacity – 5.6 MMTPA Strong relationship with after experiencing PSUs Gere Pelma -III Jitpur, success on foreign soil Peak Capacity – 5 MMTPA Peak Capacity – 2.5 MMTPA
Gere Pelma - I & II Hingula Washery Peak Capacity – 39 MMTPA Peak Capacity – 10 MMTPA Entered India Coal Bailadela Iron Ore MDO Peak Capacity – 10 MMTPA Business in 2008 - with Talabira II & III RVUNL Peak Capacity – 20 MMTPA
Operational Under Development Estimated work Iron Ore Average potential Washery force of 3200 mine life of 30 years personnel Land Mine operations Exploration Acquisition and Logistics LA: Land Acquisition MMTPA: Million Metric Tons/ Annum 16 MDO: Robust Business Model with Growing Project Pipeline
Mine Owner Payments to MDO Coal Delivery by MDO Facilitating in obtaining clearances, DPR / mine plan, Land acquisition Mine Developer and R&R and Operator (MDO) Construction of Infra such as CHP, Washery, rail siding etc. Bundled / Coal & OB Removal customized Package Coal Loading & Transport MDO to do all Investments as per Scope of Work of which some part O&M of Washery & Disposal of rejects are reimbursable O&M of railway siding
Major risks are transferred to one contractor - Ease in Contract Management
Parsa East & Kente Gare Pelma Gare Pelma Talabira II Bailadela Gidhpuri Gare Kushmund Hingula Parsa Suliyari Total Kante Basan Extn - III - II & III Iron Ore Paturia Pelma - I a Washery Washery
Owner RRVUNL RRVUNL RRVUNL CSPGCL Mahagenco NLC NCL* CSPGCL GSECL APMDC SECL MCL
Geological 516 256 200 210 736 589 362 281 607 136 3893 Reserves (MnT)
Mineable 160 452 184 94 553 554 325 158 428 109 3017 Reserves (MnT) (Est)
Capacity 15 5 7 (Est) 5 24 20 10 5.6 15 5 10 10 132 (MTPA)
Status of Operational Operational Operationa 2020 2023 2023 2020 2021 2023 2021 2021 2021 Production since 2013 in 2019 l in 2019
Adani Role MDO MDO MDO MDO MDO MDO MDO MDO MDO MDO Washery Washery
LoA LoA LoA LoA LoI Contract Status Signed Signed Signed Signed Signed Signed Signed received received received awaited received 17 MDO: Sustainable & Responsible operations driving strong financial performance
Coal Production (MMT) Revenue (Rs Crs) Responsible Green Miner
15.0 1586 Community Bringing 12.1 Engagement Mine back to and its pristine Developmen 8.3 8.3 863 stage 7.3 7.0 t 6.3 712 5.5 546 Technology Intervention Awards and s for Accolades Efficient mining FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 ROM Production Washed Coal Dispatch
EBIDTA (Rs Crs) & EBIDTA Margin (%) LT Debt / EBIDTA Community Engagement
62% Health & 58% 2.1 54% Sanitation 1.8 47% 981 Sports Skill Development Promotion & Entrepreneurship 1.0
466 0.5 337 317 Improvement in Increasing Farmer’s Education level productivity
FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 Infrastructure EBITDA EBITDA Margin (RHS) Development * Sarguja Rail COD April 2018 has boosted coal 18 dispatches in FY19 Carmichael Coal Mine - Overview
Location . Galilee Basin, Queensland, Australia
. 11 BT JORC compliant Resource Resource . 880 Mn T JORC compliant Reserves . Moderate to high energy thermal coal suited for Asian markets
. Current development: open cut mine capacity of 11 mtpa Phase I . 1st Coal on rail by April 2021
Commercially robust and competitive coal mine
• Large resource and reserves base (Pit DE >30 years) 1. Conventional mine • Deposit characteristics well understood development and • Major approvals already in place for current and future developments operational • Proven mining method enables product strategy and reduces operational risk approach • Conventional construction and execution strategies to efficiently manage cost, schedule and risk
• Comprehensive approach to product strategy development 2. Product strategy well positioned to • Carmichael 5,000kcal product aligned to resource quality and operating take advantage of strategy market requirements • Target markets’ demand increasing and forecast to continue
3. Commercially • Consistent low strip ratio robust with competitive • Sustainable low operating costs advantage • Competitive capital costs 19 Airports India Aviation – A Strategic Market
India Aviation Industry Globally India has low domestic penetration for flying • Low penetration of flying (0.07 trips per capita per annum vs. 0.3 in China) Norway 5.24 Australia 3.5 • 3rd largest domestic aviation market in 2016; poised to become 3rd largest USA 2.59 global aviation market by 2025 Canada 1.57
• Indian aviation industry has grown @ ~10% in the last 5 years; high growth Japan 1.18 (trips per capita per annum) Brazil 0.65 expected to increase over the next 5 years France 0.49 • Aviation policy aims for domestic ticketing of 500 million & international Germany 0.43 ticketing of 200 million by 2027 UK 0.42 China 0.34 10 Largest Air Passenger Markets Over 2016-2036 India 0.07
Rank, based on no of passengers Passenger traffic at Indian Airports Total Passengers Handled (millions) at Indian Airports, fiscal years 2012 - 2022
21 Source: CAPA Advisory Research Adani Airports
Poised to become the Leading Airport Operator in India Key Highlights of Recently Won Projects
Qualified Successful Bidder of 6 of India’s Leading Strategically located Airports handling 30+ million passengers
Robust Portfolio Tracking Consumption Trend – Passenger Traffic Growth of 17% for 6 airports vs. India’s Traffic Growth of 12% (5 years)
Jaipur Lucknow Robust Concession Structure – 50 year concession, 100% Ownership FY18 Px: 4.7 Mn FY18 Px: 4.8 Mn Guwahati FY18 Px: 4.7 Mn Stable regulatory environment – Hybrid Till model (Post tax returns on Ahmedabad RAB with cost pass through) with Upside from Non- Aero Business FY18 Px: 9.2 Mn Large Non Aeronautical Potential – Current Spend of ~INR 80 / pax vs Privatized airports of INR 200-300 / Pax
Significant Expansion Potential – Opportunity to Expand Combined Capacity to over 100 mn Pax in the next 10 years
Large and attractive land for monetization – 225 acres available Circle size indicates Mangaluru FY18 passenger traffic FY18 Px: 2.3 Mn Trivandrum FY18 Px: 4.4 Mn 22 Adani Airports – Successful Foray into Airports Sector
Portfolio of rapidly growing Airports Adani emerged successful in 6 recent airports bids (Rs/Domestic Px)
. Among the highest & most diversified portfolio of Airports in India 177 174 155 155 146 171 168 (NIIF) 139 160 (NIIF) (NIIF) 135 . Traffic growing at 15% - 20% YoY (AMP) (KSIDC) 115 . Low non aeronautical penetration (~Rs 80 / Px) provides a unique opportunity to enhance returns 45 (CIAL) . Significant opportunities to improve efficiencies
. 100% equity ownership vs only majority stake for other airport Ahmedabad Jaipur Lukhnow Guahati Trivandrum Mangaluru operators Adani Bid 2nd Bidder
Ahmedabad Jaipur Lucknow Guwahati Trivandrum Mangluru Total
Concession Agreement (CA) Signing by September 2019
Concession Period (Yrs) 50 50 50 50 50 50
CoD Date (estimated) Q1 2020 Q1 2020 Q1 2020 Q1 2020 Q1 2020 Q1 2020
Total Land Available / City Side Land (Acre) 987 / 28 777 / 17 1259 / 110 826 / 60 637 / 2 584 / 10 5,069 / 227
AAI Select Employees 180 167 169 173 336 116 1,141
Initial Capex (Rs Cr) 416 518 580 465 438 190 2,606
Additional Capex (Rs Cr) 10 years 2,500 1,100 1,650 1,000 800 1,200 8,250 23 Adani Airports – Growing Traffic supplemented by Roadmap for Unlocking Value
Robust Passenger Traffic Growth > Domestic average Operational Plans
21.4% Near Term (12-18 months) Medium Term (3 Years) Long Term (Beyond 3 Years) 17.1% 18.6% 17.6% 16.8% 9.1% . Build a world class team . Sweat Assets – terminal . Deliver Global Best practices 9.2 side and air side . Increase penetration of 4.8 4.8 4.7 . Debottleneck existing . Maximise volumes through 7.3 4.4 Non-aero activities and capacity and operational identify new revenue route development 1.9 2.3 constraints initiatives 4.2 4.0 4.6 streams 1.9 2.5 1.5 0.5 0.7 0.1 0.8 . City Side Development . Increasing air side and . Improve operational terminal side capacity to efficiencies . Route development maximise ATMs and strategies Passenger/ Cargo International Px (FY18 in Mn) Domestic Px (FY18 in Mn) . CAGR (last 5 Yr) (%) . Optimize costs Target Anchor Airline . Enhance non-aero for domestic operations revenues to be at par with – structurally change airports globally Revenue with Healthy EBITDA margin (FY18) the network profile . Significant ramp-up of 46% 49% 48% non aero revenues . Incentivize airlines to . Integrated City Side 40% 34% through enhance International development routes deployment 19% . Contract renegotiations . Investments in skills, 11% . Extract synergies : 22% 18% 16% 21% 17% training and knowledge . Improving range and . Between the six building quality of products airports 78% 89% 82% 84% 79% 83% on offer . Between the airports . Technology led and group business interventions to drive efficiency
Aero Revenue Non-Aero Revenue EBITDA Margin (%) 24 Transportation – Roads, Metro & Rail Adani Transportation – Roads, Metro & Rail
Road Metro Railways
Potential & Outlook Potential & Outlook Potential & Outlook • 53000 kms of NHs have been identified to be built • 60% of Indians living in urban areas by 2050 • 100% FDI in the railway infrastructure allowed under Bharatmala • Metro rail operating in 10 cities and in 12 more cities • Prospective investment of USD 131 bn in next five it is under implementation years • Under phase I target to reach 24,800 kms by FY22 • At present, Metro projects of ~Rs 2 tn are under • Government aims to boost passenger amenities by with capital of Rs 5.35 tn approval in 15 cities PPP model • PMGSY intends to award projects of 20000 kms in • India’s share in the global metro network is currently • Investment opportunities in components & coaches FY 2017-18 and targets to award projects of 25,000 limited to 3% manufacturing, Infrastructure, electrification, DFC, km in FY 2018-19 • Metro's role as main transporter has yet to gain terminals operations gauge conversion & network significance in India expansion Strategy Strategy Strategy • Focus on the projects initiated by NHAI & MORTH • Focus on the projects across the country initiated by • Adani is first investor cum developer of private • Target selected projects under BOT, TOT & HAM various States railway line in India model • Target selected underground Metro-rail, Mono-rail & • Focus on pan-India PPP projects • In-organic growth through M & A Light-rail projects • Target selected EPC projects
MORTH – Ministry of Road Transport and Highways; PMGSY - Pradhan Mantri Gram Sadak Yojana; DFC – Dedicated Freight Corridor 26 BOT – Build-Operate-Transfer; TOT - Toll-Operate-Transfer; HAM - Hybrid Annuity Model Roads – Growing Order Book
Projects under Execution
Particular Project I Project II Project III
4-lane 53 Km road from Bilaspur to 4-lane 42 Km road from Mancherial 4-lane 59 Km road from Suryapet to Project Patharapali in Chattisgarh to Repallewada in Telangana Khammam in Telangana
2 Yrs Construction Period + 15 Years 2 Yrs Construction Period + 15 2 Yrs Construction Period + 15 Project Period O&M Period Years O&M Period Years O&M Period
Project Mode Hybrid Annuity Model Hybrid Annuity Model Hybrid Annuity Model
Signed on LOA on LOA on Concession Agreement 14th May 2018 8th March 2019 8th March 2019
Project Cost Rs 1,140 Crs Rs 1,357 Crs Rs 1,566 Crs
Financial Closure Completed Completed Under Process
NHAI Grant Rs 456 Crs Rs 543 Crs Rs 626 Crs
27 Roads – Go-to-market strategy
Target Business Models
Expected %share in Target Share in SN Projects Rationale market pipeline our portfolio
HAM offers moderately good market returns in PPP while offloading partial financing 1 HAM 45% 70-75% risk to the Authority
2 TOT - 1 TOT Bundle To target TOT with steady revenue stream if available at good valuation
3 BOT 5% 10-15% BOT projects are high return & low risk (expected to be in limited numbers)
Not to target run of the mill EPC projects as they are highly competitive. 4 EPC 50% 10-20% We will target large and technology intensive, complicated project, as they are less competitive and therefore will have scope of high returns
Portfolio Threshold project Business Segments Strategic Action Plan Impact size • To target 80% of the geography Bharatmala Projects High 750+ Cr • Maintain a balance between bid competitiveness and capturing profit margins (Majorly in HAM basis) over the next 2 years
Projects by State • To focus on target states where there is a group level presence through Medium 750+ Cr Authorities committed investments
Cross-border road • To target such high-critical opportunities very carefully and after thorough due- High 500+ Cr projects diligence • To target a few initial projects bringing in differentiators in competitive debt T-O-T projects High NA financing 28 Water Water: Significant Investment Opportunities
Water Stress (withdrawals/available supply) in India India Per Capita Water Availability in Cubic Meters (cm)
• Global water demand expected to grow rapidly to touch >5,200 cubic kilometres per year by 2025 (growing at over 1.2% every year) • Agriculture in India is the prime user of freshwater with a share of 80% followed by industry & domestic applications • Per capita water availability was 5177 cm in 1951, which is down 70% to 1545 cm in 2011 • According to McKinsey, there will a demand-supply gap of 50% by 2030 in India • Indian Government foreseeing an investment of more than Rs 100,000 crore including National Mission for Clean Ganga (NMCG) • ~13 states in India spanning around 300 districts face water stress • This budget is expected to be spent towards water supply and sanitation and “water security” at • Despite a long coastline of ~7600 km, coastal areas have a huge individual states level problem of water scarcity due to poor river water availability, low The significant investment opportunities include EPC as well as Public Private Partnership ground water levels & high demand (PPP) projects 30 Source: World Resources Institute, GoI Census Water: Significant Investment Opportunities
Focus Areas Project under Execution • Adani focussing on projects in PPP/Hybrid-Annuity/EPC mode initiated by Central & Particular Detail State Government and Local Municipal Corporations
• Municipal Wastewater Treatment & Recycling: To ensure safe treatment and • Development of Sewage Treatment Plant (STP) and disposal of domestic sewage by developing Sewage Treatment Plants Project Associated Infrastructure in Allahabad • Seawater Desalination: To reduce the nation’s increasing demand-supply gap by treating seawater through desalination Project Period • 2 Years Construction Period + 15 Years O&M Period • 24x7 City Water Supply & Distribution: To provide freshwater for human
consumption on a sustainable basis • DBFOT with PPP Hybrid Annuity (40% from Govt. and 60% by Project Mode Water Project Developer)
Project Cost • Rs 400 Crs, Financial Closure achieved Treatment / Recycling / Reuse Transmission & Distribution
Concession th Agreement • Signed on 11 Jan 2019 with NMCG and UP Jal Nigam (UPJN) Raw Water Waste Water Transmission Bulk water transportation through pipeline and associated • New STP: 72 MLD Cumulative at 3 Locations (42+14+16) Municipality Waste pumping station Water (STP) Sea Water • Rehabilitation STP: 254 MLD Cumulative at 6 Locations Desalination Stand alone and/or associated work like networking, pumping Brief Scope (80+29+50+60+10+25) etc. Distribution 24x7 water distribution, • Raising Main and Gravity Main Piping : 7 Km Sewerage network WTP • Pumping Stations: 17 Nos (New + Rehabilitation) Stand alone and/or Industrial Waste Water associated work (ETP) like networking, Common ETP, Refinery pumping etc. ETP, Power Plants 31 Solar Manufacturing – Mundra Solar PV (MSPVL) Solar Manufacturing – Demand to grow at a double digit growth rate
Low Penetration in Global Energy Demand Global solar PV demand to grow at 13% CAGR Solar Manufacturing concentrated in China
(in GW) Total Cell Capacity Total Module Capacity 8.8% RoW EU India Japan USA China 168 GW 219 GW 121 122 7.4% 116 119 106 India, 2% Others, Vietnam, USA, 2% Others, 6.2% 99 33 Canada, 4% 3% 6% 5.0% 38 4% India, 45 42 79 4% 3.6% 45 14 S Korea, 3.3% 52 13 5 2.8% 2.6% 13 7 7% Canada, 2.2% 51 34 12 7 17 12 6 16 4% 12 13 15 Taiwan, 0.9% 15 12 7 14 S Korea, 0.6% 15 11 13 12 7% 7 8 6% China, 12 9 9 10 China, 2 5 31 35 40 75% 9 7 7 21 28 76% 6 9 11 2015 2016 2017 2018 2019e 2020e 2021e 2022e
Global Growth Drivers / Opportunities India: 31% power generation from Solar by 2030 Global Solar Module oversupply bottoming out
• Cells / Modules imported from India exempt Installed Capacity Projected Capacity USA from tariffs • Projected market of ~350 MW / year
• Subsidy for new solar projects supportive to global demand China 60 • Better than expected China solar target (i.e., >300 GW by 2020) positive for solar module Utility
• Resurgence of demand from Govt auctions & 88 residential will bring 43% annual growth from Europe 73 2017 levels of 6.3 GW 58 • Spain & Italy will contribute 67 GW by 2030 40 28 Africa & 22 Rooftop • MENA targets 84 GW by 2023 12 Latin 4 7 • Latin America targets 40 GW by 2021 America 2015 2016 2017 2018 2019 2020e 2021e 2022e Target
To achieve global sustainable development target, Solar PV requires annual growth of 17% till 2030 33 MSPVL – Largest Solar PV manufacturer in India… Competing on Quality, Cost & Scale
Largest integrated module manufacturer in India Global recognition for quality & performance Manufacturing Facility at Mundra, Gujarat
Module Cell Rated as Tier 1 Rated as 12001200 by BNEF in Bankable by 1000 2018 CEA in 2018 900
Rates as Rated as Top Bankable by 500 performer by 410 430 Munich RE in DNV in 2018 300 2018
Rated as Rated as Bankable by Bankable by Adani Tata Vikram Waaree Indo Solar Jupiter Solarbuyer in Black & Veatch Power Solar Solar Solar 2018 in 2018 …resulting into Diversified Marquee Clientele Solar
Process & Quality assurance Superior Product Better quality & performance vis-a-vis peers… Top Developers
• Leading QMS and excellent product quality assurance Adani Competitor • Triple stage Electro-luminescence inspection 91 • Working on the principle of lean manufacturing 88 87 88 88 85 85 85 86 • Co-locating ancillaries to achieve strict quality control 83 83 84 81 82 82 81 82 82 81 • Tie-ups with leading global institutes (ISC, UNSW, PI Berlin, 80 80 80 80 79 79 78 78 78 78 Fraunhofer etc.) for material and process improvements 76 Top EPC players Top Export players • Dedicated R&D center to enable continuous upgrading of lines as per latest developments • Process based on Just-In-Time procurement enabled by raw material tie-up through tolling / LTA • Strong inbound and outbound logistics management team
• Adani ~4MW at Mahoba, UP along with another Chinese Premium Tier-1 module > 50 MW • Performance Ratio* of Adani modules were consistently 3-5% higher than Chinese Premium Tier-1 module manufacturer 34 * Performance Ratio (PR) = Energy measured(kWh) / [Irradiance(kWh/m2) on the panel x Active area of PV module(m2) x PV module efficiency] MSPVL – Strategic Priorities aligned to leverage Growth in Industry
Strategic Priorities Order Book provides Growth Visibility
Expand EPC and Solutions offering along with latest technology implementation to Actual Sales Order Pipeline achieve a policy independent self-sustainable business model 298 259 Order book of 228 ~800* MW
134 126 EPC Services 120 111 65
Pumps/ Other O & M Services Solutions Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 * the above book excludes spot orders of ~15-20 MW per month
Key Drivers for Growth Strategic Priorities Forayed in to retail segment by appointing Channel Sales Partners on Pan-India basis to tap up to 100 MW annually with high margins Rollover of CPSU scheme of 12 GW to boost solar manufacturing with additional margins Latest Technology Branding through Government Schemes like KUSUM, SRISTI, SKY to augment additional demand Adoption to improve Channel Sales unit economics Building sustainable model by booking value added solutions viz EPC/RT/DG/Pump business up to 25% of the capacities to give additional margins of Rs 3-5 / wp Cost- No moving parts, ideal for distributed generation – generation that occurs close to the comeptetiveness point of consumption through value engineering Unlimited resources with no cost (irradiation level varies) No carbon footprint from solar Decline in battery storage product price 35 Adani Wilmar (AWL) Indian Edible Oil Consumption Growth Drivers
One of the lowest per capita oil consumption (in kg) Market Dynamics
70 61.1 59.7 63.9 63.9 63.6 • Exponential increase in consumption driven by rising income 60 62.4 62.8 64.2 59.5 60.1 levels and aspiration 50 41.2 43.8 43.8 40 39.6 39.7 • Imports which constituted 3% in late nineties of overall 30 consumption now at 70% 25.1 25.7 26.2 26.4 26.6 20 14.9 15.4 15.8 16.7 17.4 10 • Per capita consumption to rise to about 23kg by 2025 with a growth likely to be around 4% 0 2011-12 2012-13 2013-14 2014-15 2015-16 EU USA China Brazil India • Indian oilseed production stagnating and not likely to grow – fueling growth of Imports Consumption to grow manifold • Lowest Per Capita Consumption (Kg) of Edible Oil in India – 30 Huge potential to grow 26 23 20 17 20 • 50% of consumption still catered by unorganized sector- Huge potential for consumer pack business
• Demand not constraint - Supply is abundant 2015-16 2020-21 2024-25 Per Capita (In Kg) Demand (MMT) 37 AWL: Strong Growth through Brand across Food segments
Edible Oil and Food Business Leading Market Share
(as at Mar-19) 20%
14%
5% 4% 4%
AWL RUCHI SOYA KALEESUWARI GEMINI EMAMI
Basket of Brands for Edible Oil & Food Products
Edible Oil
Rice
Besan / Flour
Soya
• 50-50 JV between Adani Enterprises and Wilmar International • 18 Refineries & 10 Crushing Units Pulses • Refining capacity 11,340 tpd + Crushing 8,950 tpd + Packaging 8,360 tpd • 5000 + distributors 38 AWL: Strategic Priorities
Strategic Priorities 1
Maintain leading position in edible oil market
7 2
Exploring the business potential in Focus on business strategy aligned to shift regional overseas markets in consumption pattern
6 Adani Wilmar 3
Focus on operational synergies and Pan India network of manufacturing, financial flexibility marketing, sales and distribution
5 4
Diversified product portfolio with focus on Prudent risk management branding
Credit Rating
CARE: A / Stable 39 Defence Defence & Aerospace
PLATFORMS AND COLLABORATE WITH 3 GROW INDIAN MSMEs FOCUS ON 1 TECHNOLOGIES 2 GLOBAL PARTNERS 4 INDIGENISATION
Focus on platforms and technologies Collaborate with credible and Help develop and grow the dynamic Focus on capabilities critical for of critical importance, to assert committed global partners willing MSME’s, which are critical for a fast indigenisation including design, India's military competence, to meet to team up for the long term and scale-up and sustainable ecosystem system integration, maintenance & emerging security challenges who are willing to transfer in India support in India technology & skills
UPGRADES & LIFE CYCLE MANGEMENT - Prime 50% JV Transmission Gearbox & Gears Unmanned Aerial Systems MRO* & SUPPORT - Prime (Hermes 450 and 900) 26% Equity Design & Development Systems & SYSTEM Avionics INTEGRATION - Prime • Fighter Crafts • Unmanned Aerial Systems 26% Equity SUB-ASSEMBLY & Fighter aircrafts (Gripen Composites & Precision Machining SUB-SYSTEMS - Support • Helicopters E/F) • Satellites • Radars & Electronic Warfare COMPONENTS - Support 100% Equity Systems Systems & Avionics Metal Aerostructures & Assembly • Machining and Gear Manufacturing Advanced Materials DESIGN & R&D - Prime • Carbon Composites Aerostructures (Composites) MSME PARTNERS • Skill Building & Training Centre 41 * MRO – Maintenance, Repair & Others AEL: Sustainability
• Business in harmony with Nature • Measurement of carbon footprint across all business operations • Management systems & policies in place to ensure efficient use of resources • Strategies & initiatives to reduce resources consumption and maximize recycling
Environment
Governance Social • Streamlined governance structure with • Business growth in tandem with system, process & policy community development • CSR activities thrust areas – Education, • Governance percolates down to the Health, Livelihood development and lowest level Rural Infrastructure • Special projects – SuPoshan (Better • Regular monitoring & review of nutrition), Swachhagraha (Clienliness), performance Saksham (Skill development) and Udaan ( Career building) • All operations & activities subjected to • Operations across 12 states, 1470 regular external reviews & audits villages, touching 4 lakh+ families
42 Safe Harbor
Certain statements made in this presentation may not be based on historical AEL assumes no responsibility to publicly amend, modify or revise any forward information or facts and may be “forward-looking statements,” including those looking statements, on the basis of any subsequent development, information or relating to general business plans and strategy of Adani Enterprises Limited events, or otherwise. Unless otherwise stated in this document, the information (“AEL”), its future outlook and growth prospects, and future developments in its contained herein is based on management information and estimates. The businesses and competitive and regulatory environment, and statements which information contained herein is subject to change without notice and past contain words or phrases such as ‘will’, ‘expected to’, etc., or similar expressions or performance is not indicative of future results. AEL may alter, modify or otherwise variations of such expressions. Actual results may differ materially from these change in any manner the content of this presentation, without obligation to forward-looking statements due to a number of factors, including future changes notify any person of such revision or changes. or developments in its business, its competitive environment, its ability to No person is authorized to give any information or to make any representation not implement its strategies and initiatives and respond to technological changes and contained in and not consistent with this presentation and, if given or made, such political, economic, regulatory and social conditions in India. This presentation information or representation must not be relied upon as having been authorized does not constitute a prospectus, offering circular or offering memorandum or an by or on behalf of AEL. This presentation is strictly confidential. offer, or a solicitation of any offer, to purchase or sell, any shares and should not This presentation does not constitute an offer or invitation to purchase or be considered as a recommendation that any investor should subscribe for or subscribe for any securities in any jurisdiction, including the United States. No part purchase any of AEL’s shares. Neither this presentation nor any other of its should form the basis of or be relied upon in connection with any investment documentation or information (or any part thereof) delivered or supplied under or decision or any contract or commitment to purchase or subscribe for any in relation to the shares shall be deemed to constitute an offer of or an invitation securities. None of our securities may be offered or sold in the United States, by or on behalf of AEL. without registration under the U.S. Securities Act of 1933, as amended, or AEL, as such, makes no representation or warranty, express or implied, as to, and pursuant to an exemption from registration therefrom. does not accept any responsibility or liability with respect to, the fairness, This presentation is confidential and may not be copied or disseminated, in whole accuracy, completeness or correctness of any information or opinions contained or in part, and in any manner. This presentation contains translations of certain herein. The information contained in this presentation, unless otherwise specified Rupees amounts into U.S. dollar amounts at specified rates solely for the is only current as of the date of this presentation. convenience of the reader.
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