Adani Gas Ltd Investor Presentation

March 2019 Legal Disclaimer

Certain statements made in this presentation may not be based on historical AGL assumes no responsibility to publicly amend, modify or revise any forward information or facts and may be “forward-looking statements,” including looking statements, on the basis of any subsequent development, information those relating to general business plans and strategy of Adani Gas Limited or events, or otherwise. Unless otherwise stated in this document, the (“AGL”), its future outlook and growth prospects, and future developments in information contained herein is based on management information and its businesses and competitive and regulatory environment, and statements estimates. The information contained herein is subject to change without which contain words or phrases such as ‘will’, ‘expected to’, etc., or similar notice and past performance is not indicative of future results. AGL may alter, expressions or variations of such expressions. Actual results may differ modify or otherwise change in any manner the content of this presentation, materially from these forward-looking statements due to a number of factors, without obligation to notify any person of such revision or changes. including future changes or developments in its business, its competitive No person is authorized to give any information or to make any representation environment, its ability to implement its strategies and initiatives and not contained in and not consistent with this presentation and, if given or respond to technological changes and political, economic, regulatory and made, such information or representation must not be relied upon as having social conditions in . This presentation does not constitute a been authorized by or on behalf of AGL. This presentation is strictly prospectus, offering circular or offering memorandum or an offer, or a confidential. solicitation of any offer, to purchase or sell, any shares and should not be This presentation does not constitute an offer or invitation to purchase or considered as a recommendation that any investor should subscribe for or subscribe for any securities in any jurisdiction, including the United States. No purchase any of AGL’s shares. Neither this presentation nor any other part of its should form the basis of or be relied upon in connection with any documentation or information (or any part thereof) delivered or supplied investment decision or any contract or commitment to purchase or subscribe under or in relation to the shares shall be deemed to constitute an offer of or for any securities. None of our securities may be offered or sold in the United an invitation by or on behalf of AGL. States, without registration under the U.S. Securities Act of 1933, as amended, AGL, as such, makes no representation or warranty, express or implied, as to, or pursuant to an exemption from registration therefrom. and does not accept any responsibility or liability with respect to, the This presentation is confidential and may not be copied or disseminated, in fairness, accuracy, completeness or correctness of any information or whole or in part, and in any manner. This presentation contains translations of opinions contained herein. The information contained in this presentation, certain Rupees amounts into U.S. dollar amounts at specified rates solely for unless otherwise specified is only current as of the date of this presentation. the convenience of the reader.

2 Index

1 Introduction to and Adani Gas

2 Sector Dynamics

3 Regulatory Framework

4 Adani Gas – Operations and Financial Performance

5 Growth Strategy

3 Introduction to Adani Group and Adani Gas

STRICTLY CONFIDENTIAL Adani Portfolio: Leading Developer, Owner, Operator in

Promoters Portfolio Mkt Cap* ~USD 22 bn

74.9% 62.3% 75.0% 74.9% 86.5% 74.8%

AEL APSEZ APL ATL AGEL AGL Port & Logistics Thermal Power T&D Renewables Gas Distribution

25.00 13.42% 25.00% 43.32% 32.68% 25.00% %

Public

. Pan India presence with leadership position in each vertical

. No 1 in Ports, T&D and Thermal Power, Leading position in Renewables & Gas Distribution

Adani . Independent verticals with independent boards

. Multiple touch points with regulators & public utilities

. Nationwide enduring relationships with regional vendors across multiple sectors

* Market Cap as on 31-Dec-18 & USD/INR = 70 5 Adani Group: Track Record of Delivering World Class Assets

Leveraging Core Strengths Delivering World Class Assets

. Only HDVC line in India to be executed by a private player Large scale businesses delivering Longest Private HDVC . Location: -Mohindergarh  . Capacity: 1,980 Ckt Kms consistent growth Line in India

. Mega project developed, constructed Unmatched execution and commissioned in 9 months  capabilities – timely and cost 648 MW Ultra Mega . Location: Kamuthi,, Tamilnadu . Solar Irradiation: 1,900 kWh / m2 / year effective Solar Power Plant . Capacity: 1.25 BU / year

. Largest commercial port of India . Location: Gulf of Kutch with access Three decades of regulator and India’s Largest  stakeholder relationship to northern and western parts of Commercial Port India . Capacity: 100 MMT cargo / year

. Fastest implementation ever by any Diverse financing sources – only power developer in India - record Indian infrastructure Largest Private completion of inception to  with two Thermal Power synchronization within 36 months Investment Grade (IG) issuers Station in India . Location: Mundra, . Capacity: 4,620 MW

6 Adani Gas – India’s Largest City Gas Distribution Company

Ownership Structure Business Model

Exclusive authorisation to develop infrastructure, operate and Adani Family Public market gas in Geographical Areas (GA)

75% 25% Piped gas supply (PNG) to residences, commercial, industrial units and CNG to automobiles

Preferential domestic gas supply (CNG, Residential PNG) and AGL Mkt Cap* tie ups for Imported gas ~USD 1.6 bn Adani Gas

Centralized Operations, monitoring and Technology support to deliver safe and efficient operations 100% 50% Business Unit

AGL Licenses JV with IOC High Focus on ROEs and Growth (Existing:4, (Govt. of India Co.) New:13) (9 existing; 9 new)

Strategic Bidding for new authorisations

Long term exclusivity coupled with Business Model delivers best in class margins, returns & growth

* Market Cap as on 31-Dec-18 & USD/INR = 70 7 Adani Gas – Replicating Adani’s Infrastructure Success in Gas Distribution

Adani CNG

1,300+ 1.5

Industrial 325,000 mmscmd gas supply 4 70+ 6,000+ Residential AGL Operational CNG stations Kms pipeline 2,300+ customers 12% Cities * network Commercial 3 yrs CAGR

Largest private player in India’s City Gas space with over a decade of experience

250+ ~Rs 1,200 cr ~Rs 1,300 cr 20%+ A+ Human Capital Asset base Revenue RoE Domestic Rating

Balanced growth across customer segment and geography

* 4 Operational at AGL, 15 licenses won, 9 operational at IOC Joint Venture and 10 licenses won 8 Sector Dynamics

STRICTLY CONFIDENTIAL India’s Natural Gas Demand on a multi-year growth cycle

Lower Gas Consumption per Capita (Cbm/person) Consistent increase in Indian Natural Gas Demand

(in MMSCMD) 30,630 21,449 252 219 2,367 190 1,678 167 144 253 130 139 152 116 183 194 80 168 144 152 130 139 116

UAE Qatar United Thailand Bangladesh China India FY 15 FY 16 FY 17 FY 18 FY 19e FY 20e FY 21e FY 22e States Normalised Bull

2017 2025

Gas expected to be Other 20% of the India Other Sources, energy mix Gas, 6% Sources, 94% 80%

India has lagged, but given the global glut, this might be a advantage with significant uncontracted demand. Gas and Renewables together serves the twin purpose of climate and growth

Source: PNGRB, PPAC, MS Research 10 Natural Gas – A Low Cost, Clean & Efficient Source of Energy

Acceptability Abundance Availability Affordability Gas Value Less polluting, Increasing Expanding Imports / commoditized, Proposition clean and green Liquefaction infrastructure competitive

Poor air quality in cities supporting gas adoption (# of cities) Global Gas export capacity increasing 50% between 2016-20

In MMTPA Iran 3 398 401 407 374 Nigeria 5 328 Pakistan 5 299 B'desh 6 265 World’s 100 cities with worst Air Quality Saudi… 6 China 16 India 31 2016 2017 2018e 2019e 2020e 2021e 2022e

Supply constraints easing as domestic production is growing Natural Gas has cost advantages than oil linked fuels

In MMSCMD In $/ MMBTU In INR / liter* 123 107 Oil Linked Gas Price 88 86 89 86 93 33.4 13.1 14.8 9.5 9.1 8.4 11.8 3.2 29.2 22.6

Propane Fuel Oil LNG Domestic Petrol CNG FY 16 FY 17 FY 18 FY 19e FY 20e FY 21e FY 22e RasGas Gas Brent/ Gas S&D Cost Taxes Domestic Production From a fragmented regional market, natural gas now a global commodity. Supply is driven by new discoveries and demand by rapid infrastructure development. * On an energy equalized basis Source: PNGRB, PPAC, MS Research 11 Infrastructure Boost To Propel Gas Demand and Consumption

Carrier first - Commodity latter. Infrastructure to unlock latent demand Focus on Infrastructure Development

LNG terminals: 10 under construction

Pipeline network to be extended by 13,000 kms

Incentives to explore and extract gas

City Gas Distribution from 78 to 280 cities

LNG approved as fuel for highways

Infrastructure for natural gas ecosystem is accelerating

FY18 FY22e 2x increase in LNG 50% increase 2x increase in Import capacity In Pipeline Capacity Retail Outlets In MTPA 53 (‘000 Km) # Pumps

27 28 2424 17 1424

Import Terminal Capacity Pipelines CNG + LNG Pumps

About $23bn will be spent in the next 5 years to build energy infrastructure

Source: PNGRB, PPAC 12 Infrastructure Development Propels Gas Demand

China: 4x Increase in Gas Demand with Infrastructure Impetus Gujarat: Gas Infrastructure Integration Driving Demand

(in bcm) India China Map of Natural Gas Pipelines 239 208 187 193 171 150 134 111 84 93 73 59 48 71 60 61 51 49 49 50 53 36 37 40 42 46 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

China: Exponential growth in fuel demand with Retail Investments

2,667 2,800 2,230 1,824 25% 175 777 124 137 Gujarat’s Natural 304 101 203 74 Gas Penetration over 6% 14 17 22 38 4x of India Average FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 India Average Gujarat Heavy duty Trucks ('000) LNG station (in Nos)

Government thrust on creating infrastructure & regulatory initiatives to increase gas share to 20%+

Source: PNGRB, PPAC, MS Research 13 City Gas Distribution In India is ready for next growth cycle

Increasing Share of Gas distribution in Natural Gas Demand Growth Drivers

(in MMSCMD) 31% 31% 31% 30% 26% 28% 21% 17% 19% 14% • Coverage increasing to over 50% of Population

123 • Highway, Inter city, MHV, 2W to drive demand 111 107 97 92 93 Demographic 88 86 89 86 • Urbanisation and High rise building 29 33 37 15 16 17 18 22 25 27 • Convenience FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19e FY 20e FY 21e FY 22e India CGD Demand Domestic Production CGD as % of Domestic Production

Huge potential for CGD in India • Stringent Emission norms Only ~45% of India population covered (AGL share 7.5%) Environmental • Increasing domestic production of natural gas • Constraints on LPG production and imports Districts ~402 >700

50 227

85 Regulatory / • Favourable regulatory support for CGD 56 Government • Industrial automation supports gas 36 Priority Pre PNGRB Round 1 to 8 9th Round 10th Round Total GAs India Districts

Trinity of availability of gas supply, Infrastructure build-out and competitive pricing vs alternate fuels to drive gas demand

Source: PNGRB, PPAC, MS Research 14 Gas Distribution – Transforming India’s Energy Landscape

2018 Post 10th Round

20% 70% Population 3.5x Population

124 402 Districts 3.2x Districts

4 mn 40 mn Households 10.0x Households

1,450 7,500+ Retail 5.2x Retail Outlets Outlets

Gas Distribution sector poised for Significant Growth

15 Regulatory Framework

STRICTLY CONFIDENTIAL Sector Regulation - Light on Carrier and none on Content marketing

CGD have two distinct revenue stream: Carrier of 3rd Party Gas and direct Marketing of Gas to End users.

Carrier Content

Marketing Marketing 5 years to 8 years Unregulated by PNGRB Exclusivity Chain

Infra 25 years Domestic Available for Domestic PNG and CNG Exclusivity No parallel infrastructure allowed Gas (linked to MS and LPG respectively)

Based on Competitive Bidding Imported Based on Commercial LPG, Oil Based Tariff For Cases pre PNGRB, 14% ROI Gas Fuels

Open Post marketing exclusivity Marketing Free Pricing based on market dynamics Access 25% of capacity, if available Margin (prices aligned to alternate fuels)

Separate carrier, marketing role for GAIL Gas Post Infra Infrastructure remains with entity Uniform cross country pipeline tariff Sourcing Exclusivity Likely to be operated perpetually Regional gas hub based pricing

Gas as a source of energy is more aligned with oil which is market driven compare to electricity which is regulated

17 Regulatory & Policy Boost for CGD Development

Stable Regulatory Environment Strong Government Impetus to Gas Sector

Petroleum and Natural Gas Regulatory Board • CGD is No 1 priority on gas supply (established regulator with track record of 11 yrs)

• Preferential supply of domestic gas for domestic PNG & CNG Open & Transparent Bidding for award of geographical areas

• Network Tariff - 20% • LNG approved as fuel for highway transportation • No. of Domestic Connection - 50%

• No. of CNG Outlets - 20% • CGD eligible for funding from infra cess • Inch KM of Pipeline - 10%

• Natural gas is likely to be included in GST

• Push for LPG penetration in rural area Awards 25 years long perpetuity like Authorization • Awardee to build the network over 8 years • Strong entry barriers by regulation-exclusivity o Network exclusivity for 25 yrs o Marketing exclusivity for 8 yrs • Ban on Fuel Oil in NCR and SC suggestion to ban pan India • No regulation around marketing margin / product pricing • Work program / minimum service linked obligations • Massive infrastructure in oil & Gas

Well defined, largely unregulated and predictable regulatory framework

18 Adani Gas – Operations and Financial Performance

STRICTLY CONFIDENTIAL Adani Gas – India’s Leading Play on Gas Distribution

Unparalleled Network of Gas Distribution Pan India Footprint

2015 2018

AGL IOAGPL Volume 1.4 1.1 Chandigarh (mmscmd) Panchkula Panipat Udhamsingh Nagar Palwal-Nuh Bhiwani Faridabad Bulandshahr Bhilwara-Bundi Khurja Aligarh Adani CNG Allahabad Udaipur-Chittorgarh Gaya-Nalanda 70 Jhansi Jaunpur Retail Outlets 61 Surendranagar Kheda Anuppur Burdhman Porbandar Vadodara Barwala Navsari Daman Balasore-Bhadrak Steel Network 500 (Kms) 362

South Goa Dharwad-Hubbali

Udupi Cuddalore 3.50 Kasargod-Mahe Kozhikhode Households (Lac) 2.06 Mallapuram Tiruppur Thrissur Ernakulum

Largest private sector CGD player poised to leverage growth opportunity

20 Existing AGL Operations - Prudent Pricing & Cost Optimisation

The most diversified customer base company with balanced geographic spread Lowest operating cost in the industry

Commercial Khurja Vadodra Domestic 3% 2% 7.64 6% 8% 6.93 6.89 5.79 4.13 3.22 3.21 Faridabad 3.05 2.82 2.17 Customer CNG 29% Geographic Industrial Segment 52% Spread Ahmedabad 37% 63% FY 14 FY 15 FY 16 FY 17 FY 18

Opex (Per SCM) Op EBIDTA (Per SCM)

Access to Diverse Suppliers & Sourcing of Gas Prudent Gas Sourcing & Pricing Mechanism

2018 Sourcing of Gas • Government allocates gas for CNG & domestic as priority sector 6% • Gas for other customer segments bought from open market • Sourcing is fair mix of short term and spot contracts • Main suppliers are GAIL, GSPC, IOCL

36% 46% Pricing for Segments • Sales price are benchmarked to alternate fuels 12% • Prices are more stable than liquid fuel • Term prices are benchmarked to Brent crude APM PMT RLNG SPOT

21 Best in Class Execution with Superior Operations & Service

Execution Excellence World Class Technology for Operation Management

SAP SYCLO SCADA (Comprehensive mobile solution (State of art operations for asset management) monitoring system)

AMR GIS (Automated Meter Reading (Global Information System for system) pipeline with essential details) Execution

Focused on Superior Customer Service Zero Incident Operations

Empowering Quality Customers Management with Tech & System T4S Tools compliant

World Class Pipeline Best Health and Superior #16th 100% safety network T4S Great Place Environment Safety Customer record compliant & to Work Management Management Service certified System Systems

22 Joint Venture with IOC To Support Expansion

Strategic JV with IOCL: Public sector pedigree with private sector expertise

Infrastructure as at Sept 2018

Retail Outlets 14 Domain Infrastructure Expertise Logistics & Processes resources Network (Kms) 5,090 Manpower

Households 11,000

Total Investment ~Rs 795 Cr, Combined Equity of ~Rs 300 Cr

Strategic Advantages

  

Economies of Scale Retail and Operations Benefits Access to LNG • Minimize funding cost given parentage • Access to 25,000 retail outlets of IOC • 5 LNG Terminals • Bulk sourcing of imported LNG • Plug and play penetration for CGD • Competitive sourcing of gas • Access to wider geographies • Centralized operations, SCADA, call centers driving operating margins • Funding limited to equity contribution

Strategic Partnership with IOCL to Accelerate Growth

* MWP – Minimum Work Program 23 Resilient Operations Resulting into Strong Financial Performance

Sales Volume Mix (MMSCMD) Op EBIDTA & Opex (Rs / SCM) Op EBIDTA & PAT (Rs Crs)

CAGR 12% 26% 1.44 24% 24% 1.31 7.64 7.87 22% 6.93 6.89 1.04 1.12 0.70 0.63 0.47 0.51 3.56 365 3.05 3.21 2.82 264 281 206 0.74 173 0.57 0.61 0.68 79 101 107

FY 16 FY 17 FY 18 H1 FY19 FY 16 FY 17 FY 18 H1 FY19 FY 16 FY 17 FY 18 H1 FY19 Op EBIDTA Report PAT CNG PNG Total Op EBIDTA (Per SCM) Opex (Per SCM) EBIDTA Margin (%)

Gross Margin (Rs/SCM & %) ROCE & ROE (%) Free Cash Flow (Rs Crs) 37% 38% 33% 22%* 20% 49 19% 19% 9.65 10.12 40 33 9.56 25%* 78 125 141 12.34 21% 11.09 11.80 19% 18% 7.69 7.11 7.73 121 91 93

FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 PNG CNG FY 16 FY 17 FY 18 H1 FY19 Total Gross Margin (%) ROE ROCE FCF (Post Capex) Capex IOAGPL Equity * annualised 24 Adani Gas: Large Addressable Market Size

Infrastructure creation in new 34 GAs would open up a large opportunity

Total Market Size Steel Pipeline 3900 Network (Km) 500 97 mmscmd 2018 2027

Transport Market 1550 CNG Retail Size Outlets (#) 65 62 mmscmd 2018 2027

Residential Market Households 6.00 Size (#) 0.35 14 mmscmd 2018 2027

25000 Industrial Market Industrial / Size Commercial Customers (#) 3000 22 mmscmd 2018 2027

Adani Gas is well positioned to benefit from the large scale opportunity

25 Experienced Board and Management Team

Esteemed Board Members

Mr Mr Mr Suresh Manglani

CEO & Strong Sponsorship Additional Director

Mr Maheswar Sahu Mr Naresh Nayyar Mrs Chandra Iyengar

Independent Directors

26 Growth Strategy

STRICTLY CONFIDENTIAL Growth Strategy

Proven track record of expanding footprint

• New areas are targeted towards high consumption intensity and environmental sensitivity

• Prospect of CNG corridor among the new areas

• New opportunity to build LNG retail outlets on highways

• Execution excellence – experienced team for Design, Engineering and project execution

• Digital technology driven servicing & SCADA based operations monitoring

Robust growth strategy to increase market share with focus on maximising returns

Existing Geographical Areas Investment for Growth Efficiencies

• Expand Existing CGD Network • Return Focussed New Bids • Leverage Group strengths and Synergy • Organic growth • Pursue New Industrial and Commercial Load • Process and cost efficiencies • Tap unconnected zones • Technology and Monitoring • Optimize Supply Portfolio • Integrated expansion with Industrial / CNG as anchor load

Adani Gas along with JV covers approximately 7.5% of India’s population

28 Recently won bids to support Growth Aspirations

Market Share Based on Recent Bids Plan for 50 Geographical Areas in Next 5 Years

Geographical Areas

Target : Significant market share by next decade 38

Business Snapshot

38 GAs Coverage 25 (~7.5% population)

Volume Potential 10-15 mmscmd

7

States: Gujarat, Bihar, Haryana, Karnataka, , Madhya Pradesh, Rajasthan, , Uttar Pradesh, Uttarakhand, West Bengal, 3

Adani Gas targets 10% population across geographies by 2023 with a proposed investment of over $1bn in the next 5 years

29 Adani Gas: A Compelling Investment Opportunity

✔ Adani Gas is the largest private sector player – well positioned to take advantage of growth in NG sector

✔ Natural gas – clean energy source, expected to be 25% of the India energy mix in the medium term

✔ Per capita consumption of gas expected to rise exponentially

✔ Strong Government focus for shifting towards gas based economy

✔ Strong track record of project execution, cost effective operations and customer service

✔ Robust Strategy to help in building pan India CGD network

30 Sustainability

Education Livelihood development • Adani Vidhyamandir • Vocational training • Underprivileged Children • Cattle vaccination • Training Volunteers for teaching • Animal Husbandry • Girl Child Education • Skill upgradation

Health Rural Infra Development • Mobile dispensary • Pond deepening • Immunization for kids • Check dam construction • Teaching sanitation in rural area • Village drainage system • HIV/AIDS awareness campaign • Roads, drinking water, power etc.

Learning & Development CSR Spending (Rs Crs)

Training (Man-Hrs) No of Employees 2.83 3432 231 2.29 1.97

7 152 11 232

Sr Management Middle Management Junior Management FY16 FY17 FY18

31 Thank You