(Bloomberg) -- Adani Enterprises, the flagship of billionaire Gautam Adani, will spend around $1.5 billion on its fledgling data center business in the next three years, as growth focus returns at the Indian conglomerate after a short seller attack sent it into months of damage control.
The annual capital expenditure on the data center business, called AdaniConnex – a joint venture with the global data center provider EdgeConnex – is expected to be about $500 million this year as well as the next two years, Jugeshinder Singh, Adani Enterprises chief financial officer, told analysts according to a filing late Wednesday.
The company is planning to build nine data centers and targeting a total capacity of 1 gigawatt by 2030. This will provide infrastructure for the booming digital services demand in the nation of 1.4 billion people that’s already luring the biggest global firms such as Amazon.com Inc and Google.
AdaniConnex, which has only one operational data center in Chennai so far, has completed almost two-thirds of the construction in the Noida and Hyderabad facilities, according to a November 2 investor presentation.
Chennai’s phase 2 development is also underway while land acquisition is on for Hyderabad and Navi Mumbai. The joint venture firm raised $213 million debt in June.
Group’s Incubator
The data center unit is one of the newer businesses for Adani Enterprises, the incubator for the group. It posted underwhelming earnings this month as revenue from its traditional coal trading business declined while newer businesses did better.
The latest capital spending guidance from the CFO shows accelerated expansion at the ports-to-power conglomerate that spent much of this year recovering from Hindenburg Research’s bombshell allegations of corporate fraud in January. Singh has indicated a slightly lower expenditure for data centers last quarter.
The Adani Group, which was on a breakneck expansion spree until the short seller swipe plunged it into a crisis, has repeatedly denied Hindenburg’s accusations.
The Adani Group has clawed back some ground in recent months with GQG Partners buying into several Adani firms and banks signing off on a $3.5 billion refinancing deal.
The US government’s development finance agency this week gave a $553 million funding support for its port project in Sri Lanka, marking the latest endorsement for the conglomerate.
