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AAHL fundraise in line with monetization strategy, strengthens growth outlook

* Adani Airport Holdings (AAHL), a subsidiary of Adani Enterprises (AEL), has entered into a share subscription agreement and a shareholders’ agreement to raise equity capital of INR98b (USD1b) from a consortium of investors, comprising Alpha Wave Global, Premji Invest, Temasek and BlackRockmanaged funds.

* The investors will subscribe to new equity shares of AAHL in three tranches, with the final tranche expected to be completed by Jul’27. Upon the completion of all three tranches, the investors will collectively hold a ~5.54% stake in AAHL.

* The equity infusion is aimed at capacity expansion and monetization initiatives across AAHL’s eight airports. Management intends to use the proceeds to:

(1) modernize and expand airport infrastructure,

(2) develop ~22msf of mixed-use Adani Airport City projects in the first phase, and

(3) scale up ground handling and other non-aeronautical businesses. The investment is expected to increase AAHL’s aggregate capacity to serve ~200m passengers annually, providing a significant runway for passenger growth and commercial monetization.

* The transaction values AAHL at ~INR1.7t, equivalent to ~44% of AEL’s current market capitalisation of ~INR3.9t and implying ~42x FY26 EV/EBITDA.

Valuation and view

* We view the transaction positively as it brings in high-quality global investors and provides growth capital to fund AAHL’s sizeable expansion pipeline. We see scope for further monetisation and strategic investments across AEL’s key businesses, which will unlock embedded value and provide additional funding to support the group’s large growth capex pipeline.

* The portfolio is moving from capital deployment to value creation, with airports, new energy, and data centers entering the scale-up phase and mature businesses generating cash. As capex intensity moderates and incubated businesses move toward monetization, rising cash generation should support faster deleveraging and further capital recycling.

* We estimate a CAGR of ~22%/29%/82% in revenue/EBITDA/PAT over FY26- 29, aided by growth, margin expansion, and increasing contribution from high-margin verticals.

* We believe its market leadership, superior scale, diversified growth portfolio, and proven incubator model positions AEL as a leading global infrastructure platform. We maintain our BUY rating on AEL with an SoTP-based TP of INR3,880

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