After spending two decades building a business empire centered around coal, Indian billionaire Gautam Adani is now looking beyond the fossil fuel to cement his group’s future. His ambitious plans are getting a boost from Prime Minister Narendra Modi.
Adani has emerged as India’s infrastructure king, diversifying from mines, ports and power plants into airports, data centers and defense—sectors Modi considers crucial to meeting India’s economic goals. Investors are rewarding the pivot, betting the tycoon’s strategy of dovetailing his interests with the government’s development program will pay off.
The group’s six listed units added a combined $75 billion to their market value in the past year at the height of a pandemic, capping the best 12 months in their history. That’s the most after the nation’s two biggest business empires, Tata group and Mukesh Ambani-led Reliance Industries Ltd. Blue-chip names including French oil giant Total SE and Warburg Pincus LLC have plowed money into Adani’s companies.
In less than two years, Adani has gained control of seven airports and almost a quarter of India’s air traffic. He has unveiled plans to boost his renewable energy capacity almost eightfold by 2025, positioning himself to benefit as the government debates ambitious climate targets that would cut net greenhouse gas emissions by mid-century. Last week, he won a contract to co-develop a port terminal in Sri Lanka, a neighbor India is courting to check China’s influence in the region. Adani Enterprises Ltd. signed a pact last month with EdgeConneX to develop and operate data centers across India.
“Adani is politically savvy and invests in mostly sensible, long-dated infrastructure projects” broadly tied to government priorities, said Tim Buckley, director of energy finance for Australia and South Asia at the Institute for Energy Economics and Financial Analysis, or IEEFA. “So long as India sustains strong growth, the group is likely to prosper under his leadership and witness a surge in global investor interest.”
The focus on India’s infrastructure forms “the core of our ‘nation building’ philosophy” and the group has created thousands of jobs and delivered unprecedented value to its shareholders, Adani said at a JPMorgan India Summit in September. A representative for the group declined to comment for this story.
After starting out as a commodities trader in the late 1980s, Adani is now richer than Jack Ma and is India’s second-wealthiest person with a net worth of $56 billion. He added $50 billion to his fortune in the past year, about $5 billion more than Ambani, Asia’s richest man, according to the Bloomberg Billionaires Index. Adani’s net worth rose more than any other billionaire’s this year.
Adani shot into the international limelight when he won a coal project in Australia in 2010. Ever since, he’s come under attack from climate activists including Greta Thunberg. A “Stop Adani” campaign by environmentalists disrupted development, with pressure building on lenders to turn off the credit tap. In a 2019 interview with Bloomberg News, Adani said the project’s goals were energy security for India and jobs for locals.
But back home, Adani has been at the center of another controversy that got louder especially after Modi became prime minister in 2014. Opponents of the powerful leader say Adani’s success is largely due to his closeness to Modi—an allegation denied by the tycoon—and his propensity to align his investments with Modi’s policy objectives.
How much did your wealth increase in 2020? Zero.
You struggle to survive while he makes ₹ 12 Lakh Cr and increases his wealth by 50%.
Can you tell me why? pic.twitter.com/5sW65Kx7bi
— Rahul Gandhi (@RahulGandhi) March 13, 2021
Critics point to reports that the federal government under Modi relaxed airport bidding rules, helping Adani’s group qualify despite having shown no prior experience running an airport. A lease the conglomerate won in the southern state of Kerala faced challenge in court, with a local minister last year calling the winning bid an “an act of brazen cronyism.”