New Delhi: Gautam Adani, the Indian billionaire who turned a small commodity trading company into a conglomerate spanning ports, mining and green energy, is now Asia’s richest person.
The 59-year-old tycoon’s net worth hit $88.5 billion on Monday, according to the Bloomberg Billionaires Index, eclipsing fellow countryman Mukesh Ambani’s $87.9 billion. With a jump of nearly $12 billion in his personal fortune, Adani is the world’s biggest wealth gainer this year.
The coal tycoon – whose controversial Australian mine project has caught the eye of climate activists including Greta Thunberg – has increasingly looked beyond fossil fuels for expansion. He is looking to renewable energy, airports, data centers and defense contracts – priorities that Indian Prime Minister Narendra Modi also considers crucial for nation-building and achieving the country’s long-term economic goals. country.
“The Adani Group spotted and entered all the current sectors at the right time, which appealed to a select group of overseas portfolio investors,” said Deepak Jasani, head of retail research at HDFC. Securities Ltd, a Mumbai-based brokerage firm. “The sectors are capital intensive and the company has had little difficulty raising funds to grow.
Some of the Adani Group’s listed shares have soared more than 600% in the past two years on bets that its push into green energy and infrastructure will pay off as Modi seeks to revive the 2.9 economy. trillion dollars and achieve India’s net zero carbon target by 2070. MSCI Inc.’s decision to include more Adani companies in its Indian benchmark has also meant that any fund following the gauge will have to buy the shares.
While 2020 was the year of Ambani – his oil-petrochemical conglomerate Reliance Industries Ltd. created billions of dollars of wealth through a tech pivot that brought in Facebook and Google Inc. as investors — the pendulum has since swung to Adani.
The two Indian billionaires – who built their empires on fossil fuels or coal – are now pushing ahead with green energy projects. Ambani has committed $10 billion over the next three years as part of a $76 billion renewable energy financing plan. Adani has pledged to invest a total of $70 billion by 2030 to help his group become the world’s largest renewable energy producer.
Companies such as Total SE and Warburg Pincus LLC invested in Adani’s companies in 2021. The French oil giant agreed in January 2021 to buy 20% of Adani Green Energy Ltd. and a 50% stake in the Indian partner’s portfolio of operating solar assets, albeit at a steep discount. The value of the transaction was only $2.5 billion, compared to Adani Green’s market capitalization of $20 billion at the time.
In March 2021, Warburg announced that it would invest $110 million in exchange for approximately 0.5% of Adani Ports and Special Economic Zone Ltd.
As part of its green push, Adani unveiled plans to increase its renewable energy capacity eightfold by 2025. In May, Adani Green agreed to buy SoftBank Group Corp’s local renewable energy business. . in a deal that gave SB Energy India an enterprise value of $3.5 billion.
In just three years, Adani has taken control of seven airports and almost a quarter of Indian air traffic. His group now owns the country’s largest airport operator, electricity producer and town gas distributor in the non-state sector.
Shares of Adani Green and Adani Total Gas Ltd., a Mumbai-listed joint venture with the French company, have risen more than 1,000% since the start of 2020. Flagship Adani Enterprises Ltd. grew by more than 730%, Adani Transmission Ltd. more than 500% and Adani Ports 95% over this period. The benchmark S&P BSE Sensex gained 40% in comparison.
Weak analyst coverage has not deterred MSCI from adding some of Adani’s shares to its Indian gauge. Three of the tycoon’s listed companies were included in May, bringing the group’s total footprint to five. The addition has led to more mandatory buying by gauge-following investors, HDFC’s Jasani said.
A college dropout, Adani first tried his luck in the Mumbai diamond industry in the early 1980s before returning to his home state of Gujarat to help run his brother’s plastics business. In 1988, he created Entreprises Adani.
The businessman is a crisis survivor. More than two decades ago, he was kidnapped and held for ransom. In 2008, he was among the hostages at the Taj Mahal Palace hotel in Mumbai during the terrorist attacks that killed at least 166 people.
Adani’s sustainability claims and green ambitions are under fire from climate campaigners who point to the group’s Carmichael coal mining project in Australia, which will increase the supply of the highly polluting fossil fuel. The Adani Group opted to use its own money after struggling to secure external funding and said in December it was ready to begin the first coal exports from the Australian mine.
The billionaire has also come under attack from Modi’s political opponents for his closeness to the powerful leader, with some even calling him cronyism. Adani dismissed these criticisms as groundless and thrived on his successful strategy of aligning his investments with Modi’s priorities.
Some of Adani Group’s big businesses, such as ports, are “almost monopolies”, said Sanjiv Bhasin, director of local brokerage IIFL Securities Ltd. they took advantage of it,” Bhasin said.
By Alex Sazonov and Nupur Acharya, Bloomberg