Adani World: The Journey of a Master Class Indian Entrepreneur

With Gautam Adani at the helm, he founded one of the world’s largest conglomerates, the Adani Group. Ports, Power, and Coal mining. Based in Mumbai, India, his group is considered one of the 10 largest conglomerates in the country. Gautam Adani’s life was anything but an easy ride. With humble beginnings, a quest for success, and the gift of gab, he has carved a name for himself in India, Asia, and today on the global stage. Gautam Adani is arguably one of the richest people in the world. Gautam Adani’s method remains a mystery to many? Let us explore in today’s blog.

Gautam Adani is the Chairman and Founder of the Adani Group, one of India’s leading business conglomerates. The group has a diverse portfolio of businesses in sectors ranging from energy, resources, logistics, agro and real estate.

Adani was born in 1962 in Ahmedabad, Gujarat, into a family of Diamond Merchants. He completed his schooling from Sheth Chunilal Damodardas Baroda High School and went on to do his Bachelors in Commerce from Gujarat University.

After completing his degree, Adani began his career working with the Shipping Corporation of India Ltd., Mumbai. He quickly rose through the ranks and became a senior executive within a few years. In 1988, he left Shipping Corporation to start his own business in commodities trading. He founded the Adani Enterprises, which would become the flagship company of the Adani Group.

Over the next few years, Adani rapidly expanded his businesses. He entered into various sectors such as coal mining, power generation, and transmission. In 2010, he acquired the Australian company Carmichael Coal Mine Limited. This was a major coup for Adani, as it gave him access to one of the world’s largest untapped reserves of coal.

Adani is a self-made entrepreneur who believes in the philosophy of backward integration. He has consistently invested. Today, the Adani Group is one of the most successful businesses in India. It has a turnover of over US$12 billion and employs over 60,000 people

Adani Ports and Special Economic Zone Ltd (APSEZ) is the flagship company of the Adani Group, India’s leading conglomerate with businesses in key industries such as energy, resources, logistics, agro and infrastructure.

APSEZ owns and operates 10 ports and terminals across India, including the country’s largest port at Mundra in Gujarat. The company has a strong presence in the freight being handled from Indian ports with a market share of 21 percent.

Incorporated in 1998, APSEZ began operations in 2001 with the development of a multi-purpose terminal at Mundra Port. Today, APSEZ has a capacity of handling over 210 million tonnes of cargo per annum.

The company continually invests in port infrastructure and has been at the forefront of debuting several ‘firsts’ in the Indian ports sector such as installation of a solar power plant, setting up of an inland container depot (ICD), introduction of container carrier vessels and mechanization of coal handling.

Under the able leadership of Founder Chairman Gautam Adani, APSEZ has emerged as a global player with a strong focus on long term partnerships and sustainable growth.

Pellet at Coal Industry: The Carmichael mine in outback Queensland state the world’s biggest coal exporter, but it is a vital source of supply for importers such as power plant in India.

When Adani bought the project in 2010,it envisioned building a 60 million tonne a year mine with a 400 km(250 mile)rail line for around A$16 billion($11 billion),one of several projects in the then untapped Galilee Basin.

The coal will be exported from a terminal at Abbot Point, which Adani bought for $2 billion.

That was a game changer move because controversial coal miner Adani Mining has posted a full-year profit of $388.4 million in Australia without selling as much as a bucket of coal, courtesy of a stronger Australian dollar against the US greenback.

As well as energy efficiency services, Adani Group has a significant presence. Billionaire Gautam Adani said his logistics-to-energy conglomerate will invest $70 billion over the next decade to become the world’s largest renewable energy company and produce the cheapest hydrogen on the Earth.

Adani Green Energy Ltd (AGEL), the world’s largest solar power developer, is targeting 45 gigawatts of renewable energy capacity by 2030 and will invest USD 20 billion to develop a 2 GW per year solar manufacturing capacity by 2022-23.

Adani Transmission Ltd (ATL), India’s largest private sector power transmission and retail Distribution Company, is looking to increase the share of renewable power procurement from the current 3 per cent to 30 per cent by FY 2023 and to 70 per cent by FY 2030.

Financial Growth and Stock Investment:

1988: Started commodity trading

1994: Listed on BSE and NSE @ Rs. 150/share, Subscribed 25x

1995: Mundra Port commenced operations

1996: Bonus Issue 1:1

1999: Commencement of IRM business, Signed JV with Wilmar, Singapore Bonus Issue 1:1

2001: Started city gas distribution business

2005: Awarded India’s first MDO Contract

2006: Stock- Split of AEL (10:1)

2007: Adani Ports and SEZ Limited IPO Subscribed 116x, FCCB issue of $250 Mn, Green Silo Depot commissioned (seven locations)

2008: Acquired Bunyu Mine, Indonesia

2009: Adani Power Limited IPO subscribed 21x, Bonus Issue 1:1

2010: Raised QIP of $850 million, Acquired the Carmichael mine Australia

2015: Completed the demerger of APSEZ, APL and ATL

2017: Started manufacturing Solar PV panels

2018: Demerger of Adani Green Energy and Adani Gas, Fortune emerged largest food FMCG brand in India

2019: Emerged #2 largest IRM player in the world

2020: Forayed into Airports business with portfolio of 6 airports

2021: Data Center JV “Adani Connex” with EdgeConnex to develop and operate Data Centers across India, Acquired 23.5% stake in India’s leading airports – Mumbai airport

2022: Completed acquisition of Mumbai and Navi Mumbai airports, Adani Wilmar Limited IPO subscribed 17x.

Adani Group Open Offer for ACC, Ambuja Cement Additional Stake: Adani Group has launched an open offer of 31000 crores. The offer has been made to acquire an additional 26 per cent stake of Swiss firm Holcim from public shareholders of two Indian listed companies ACC Limited and Ambuja Cements. In May this year, the Adani Group announced that it had entered into a deal to acquire a controlling stake in Holcim Limited’s business in India for USD 10.5 billion.

Let us tell you that with the completion of this deal, the way for Adani Group to become the second largest cement producer in the country will be completely cleared. The Securities and Exchange Board of India (SEBI) gave its approval to the proposal of this open offer of Adani Group only last week. The Competition Commission of India (CCI) has approved the Adani Group’s proposal to acquire Ambuja Cements and ACC Cements on August 13 itself.

Adani Group has brought an open offer of Rs 385 per share to buy 26 percent shares of Ambuja Cements Limited. Whereas an open offer has been brought at the rate of Rs 2300 per share to buy 26 percent shares of ACC Cements. The open offer for both the companies will be open from August 26 to September 9.

Adani Group has decided to buy 51.63 crore equity shares for Ambuja Cement. This is 26 per cent of the expanded share capital, which may cost close to Rs.1980 crores. Adani Group has announced to buy 4.89 crore shares for ACC Limited, which may cost 11,260 crores. After the agreement between Adani Group and Holsim, it has been decided to bring an open offer. The Adani Group is in the process of acquiring a controlling stake in Holcim India’s India business.

Adani Group is making ambitious plans in the cement business. Adani Group’s Gautam Adani expects infrastructure development work in India to pick up in the coming years and his entry into the cement business is going to help the Adani Group grow its business.

In recent times has also diversified into port operations and airport concessions as well as other projects in the power sector, agriculture, education, urban solutions and minerals

Latest and Upcoming Investment and Deals

  • Gautam Adani bought another port, business spread in 8 states, total 12 ports:

Gautam Adani, CEO of Adani Group, the richest man in India and Asia, has recently expanded his business rapidly. He named another port after him. Gangavaram Port Ltd entered his Gautam Adani pocket. Adani Group Adani Ports and Special Economic Zone (APSEZ) has purchased all shares of Gangavaram Port. Gangavaram is his third non-major port in Andhra Pradesh.

The Company has received approval for this transaction from NCLT Ahmedabad and NCLT Hyderabad. Adani Port and Special Economic Zone is the largest port facility in the country. Already owns more than

40% of his capital is in Gangavaram port. The company has now purchased its remaining 58.1% stake. The company’s portfolio now has 12 ports. Acquisition of 517 million shares of Gangavaram port valued at Rs 6.2 billion at Rs 120 per share. Adani Ports will acquire 58.1% of capital from DVS Raju and his family through a share exchange. Gangavaram Port is an all-weather deep sea port. Large vessels up to 200,000 DWT can be accommodated. The port currently operates 9 berths.

 The transaction marks another step for APSEZ as it continues its aggressive expansion strategy along the vast Indian coastline.

 Acquisition of Haifa Port: In July, Adani Group acquired Haifa Port, one of Israel’s largest ports. This port he bought for $1.18 billion. Port Haifa is Israel’s second-largest port.

  • After Ambuja-ACC, now Adani’s eyes on this cement company, deal is about to happen:

 After a strong entry into the cement sector, Adani is now poised to increase its dominance in the sector. Accordingly, it plans to add another cement company to its portfolio, for which a round of negotiations is underway. According to the report, it is now looking to buy the cement units of debt-laden Jaiprakash Power Ventures. The company’s JP Cement is said to be very popular in the industry.

 The report said that Adani Group is preparing to make this deal for 606 million dollars (more than 992 million crowns). As part of this, negotiations are ongoing for the purchase of a cement mill and other small assets. It says Asia’s richest person will get it through one of its recently acquired cement units. This contract has not yet been officially announced, but is expected to be signed in the near future.

  • Invest Rajasthan Summit: Adani will invest 65 thousand crores in the state.

Speaking at the inaugural session of the Rajasthan Investment Summit, Gautam Adani said, “We expect an investment of Rs 65,000 crore in the next 5-7 years in all existing and upcoming projects in the state. This will create 40,000 direct and indirect employment opportunities.” According to Adani, projects of 10,000 MW of renewable energy capacity are in various stages of implementation. 50,000 crore were invested in it.

Chairman Gautam Adani said that we have started commercial operation of hybrid projects (wind and solar) in the state. Besides, the group will invest Rs 7,000 crore to double the cement production capacity in the state, he said.

Other state projects include converting the Jaipur airport into a world-class facility, developing a supply network for PNG and CNG, and rapidly increasing the availability of clean fuel.

Gautam Adani and Controversies:  In the late 1990s, he was under investigation for alleged invoicing and money laundering. He was also accused of possible collusion with rogue businessman Ketan Parekh.

His abduction in 1999 by underworld don Anees Ibrahim had made headlines overnight. He was released for ransom of 3 crores. However, the reasons for the kidnapping and other details could not be confirmed.

In 2002, the Delhi Police detained him on charges of cheating in a case forged by a rival.

Gautam Adani was accused of supporting Narendra Modi during the 2014 Lok Sabha elections. He was accused of providing special benefits to Modi by providing Adani Group chartered aircraft to travel for rallies across India. Clarifying the allegation in an interview with CNBC, Mr. Adani said the BJP paid market value to its group of companies to use its aviation services.

Adani Empire Deeply Over-leveraged: The country’s richest person Gautam Adani has a heavy debt burden on the Adani Group. The group continues to invest aggressively in existing and new businesses, which are being funded mainly through debt. Due to this the group has become Deeply Overleveraged. These things have been said by Credit Sights, a unit of international credit rating and research company Fitch Group, in a recent report. In this report, referring to the huge debt on the Adani Group, it has been feared that if the situation worsens, this group may get caught in the debt trap and may also become a defaulter. According to the report, the total debt of Adani Group companies is Rs 2.3 lakh crore.

In conclusion, Adani is a master class Indian entrepreneur who has journeyed from rags to riches. Starting out as a young man with nothing, he has worked hard and achieved success in everything he has put his mind to. He is an inspiration to all who aspire to be successful in life.

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