MUMBAI : Adani Total Gas Ltd (ATGL), a joint venture between Adani Group and French energy behemoth TotalEnergies, plans to invest ₹18,000-20,000 crore in the next 8-10 years to build infrastructure for its gas distribution business, said Parag Parikh, CFO, ATGL, in a note in the company’s FY23 annual report.
The company, which currently has a network of 460 compressed natural gas (CNG) stations and 700,000 domestic consumers of piped cooking gas, said it will use the investment to add more CNG stations and expand its network of gas pipelines.
“We intend to build over 3,000 electric vehicle charging points across India; we are commissioning one of India’s largest biomass plants at Barsana in Uttar Pradesh with a starting capacity of 600 tonnes per day,” Parikh said. The company is optimistic about the future of gas in India, as the government is looking to increase the share of natural gas in the country’s energy mix to 15% by 2030, from 6% now.
ATGL has invested at least ₹1,150 crore to create additional infrastructure in FY2023 and now waits for clarity on allegations made against Adani Group by short seller Hindenburg Research on 24 January.
TotalEnergies has put its $4 billion planned investment in Adani New Industries Ltd. (ANIL) on hold. The investment would have amounted to a 25% stake acquisition in ANIL and help the group work towards its ambitious $50 billion capex target to co-develop green hydrogen production capacity in India.
ATGL’s debt-equity ratio stands at 0.47 times, with a leverage ratio of 1.1 times, according to the annual report.
ATGL’s market capitalization is currently ₹72,054 crore. However, the company’s shares have underperformed the broader market in the past year, declining by 72%, with most of the fall coming after Hindenburg’s damning report on the conglomerate.
In FY2023, ATGL reported a 5% year-on-year increase in net profit to ₹530 crore, with revenue increasing by 46% to ₹4,683 crore.
ATGL’s return on capital employed was at 21.61% and return on net worth at 19.74% as on 31 March 2023.
In the latest annual report, the company said its optimism was strengthened by a government initiative to curb gas price volatility by reviewing the APM (Administered Price Mechanism) price formula and putting a ceiling and floor on the APM price at $6.5/ mmBtu (million British thermal units) and $4/mmBtu respectively from 8 April 2023 (with a nominal $0.25/mmBtu increase applied on floor and ceiling prices in two years).
“These initiatives will ensure a stability in domestic gas prices and get India beyond the gas volatility of FY 2022-23,” said the company.
On Wednesday, shares of Adani Total Gas closed up 2% at ₹654.50 apiece on the NSE.
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Updated: 29 Jun 2023, 09:47 PM IST