Mukesh Ambani and Gautam Adani, India’s two richest billionaires, are poised to go head-to-head in 2022.
For years, Mukesh Ambani and Gautam Adani snuck their way to the top of Asia’s wealth ladder. One built a telecommunications and retail empire, while the other controlled transportation and energy distribution. However, the two billionaires from India’s state Gujarat are rapidly overlapping, setting the stage for a confrontation that may alter the country’s business climate. Given the duo’s political ties, the shock is sure to reverberate across the halls of power.
The Adani Group is considering purchasing a stake in Saudi Aramco from the kingdom’s Public Investment Fund, possibly as part of a bigger tie-up or asset swap. This comes barely months after Ambani’s Reliance Industries Ltd. and Saudi Aramco scrapped plans to sell 20% of Reliance’s oils-to-chemicals division to the Saudi behemoth for $20 billion to $25 billion in Aramco stock. In an effort to strengthen the partnership, Reliance got Aramco chairman Yasir Al-Rumayyan to join its board of directors as an independent director last year.
About Gautam Adani
His full name is Gautam Shantilal Adani. He was born on June 24, 1962. He is an Indian industrialist and philanthropist worth billions of dollars. He is the founder and chairman of the Adani Group, which is a multinational company based in Ahmedabad that specializes in port development and operations in India. He also serves as the president of the Adani Foundation, which is run by his wife, Priti Adani.
According to Forbes, he is the richest man in Asia and India as of March 3rd, 2022, surpassing Mukesh Ambani’s net worth of US$92.9 billion (Rs.7,00,000 crores Plus). At the same time, Gautam Adani’s net worth increased by $49 billion last year, surpassing that of Elon Musk and Jeff Bezos.
As of March 07, 2022, he is ranked 10th on Forbes’ real-time billionaires’ list. In 1988, he formed the Adani Group, which has since expanded into areas like resources, logistics, energy, agriculture, defence, and aerospace. He owns a 74% share in Adani Ports & SEZ, a 75% stake in Adani Enterprises, and a 74% interest in Adani Power.
Adani Enterprises Ltd is an Adani Group subsidiary and an Indian multinational public business. It has businesses in coal mining and trade, airport operations, edible oils, road, rail, and water infrastructure, data centres, hydrocarbon exploration, defence and aerospace, multimodal logistics, and agro commodities. It is based in Ahmedabad. It primarily deals with the group’s integrated resources management, electricity trading, and natural resources divisions on a standalone basis.
It has various subsidiaries:
Adani Cement, also known as Adani Cement Industries Limited (ACIL), is an Indian cement manufacturer headquartered in Gujarat. Adani Group incorporated it on June 11, 2021. Adani Cement is an Adani Enterprises wholly-owned company that has yet to begin operations. In June 2021, the Adani Group announced that it planned to build a cement plant in Maharashtra with an initial capacity of 5-million tonnes per year and a 900-1,000 crore budget. The Group also proposed a 10-million-tonne-per-year cement plant in Lakhpat. However, the project was later shelved.
Adani Airport Holdings
The airport management and operations subsidiary is Adani Airport Holdings. It owns the Chhatrapati Shivaji Maharaj International Airport and the under-construction Navi Mumbai International Airport and is the biggest shareholder in Mumbai International Airport Limited (MIAL). In addition, the corporation has a 50-year lease on the international airports of Ahmedabad, Guwahati, Jaipur, Lucknow, Mangalore, and Thiruvananthapuram, which will begin in January 2021. For the next 50 years, it will operate, manage, and develop all six airports.
Adani Defence & Aerospace
It is the company’s defence manufacturing division. It produces armed drones like the Hermes 900 UAV and small guns like the IWI Negev, Tavor TAR-21, and IWI ACE. A manufacturing facility for unmanned aerial vehicles has been established in Hyderabad, Telangana, as part of a joint venture between Elbit Systems of Israel and Adani Defence and Aerospace, which was opened in 2019. Adani Defence Systems and Technologies bought Alpha Design Technologies Pvt Ltd., a company that designs, develops, and manufactures defence electronics and avionics, in April 2020.
Adani Enterprises owns and runs mines in India, Indonesia, and Australia and supplies coal to Bangladesh, China, and other Southeast Asian countries. Around 2016–17, it produced 3.9 Mt of coal at a coal mine in Bunyu, North Kalimantan, Indonesia. The Group has made the most significant investment by an Indian firm in Australia at the contentious Carmichael coal mine in Queensland’s Galilee Basin.
Still, the mine’s development was challenged in court by 2020 due to the Australian government’s failure to follow environmental laws. Adani Australia, Adani Enterprises’ contentious Australian mining arm, was renamed Bravus Mining & Resources in 2020. The Carmichael coal mine in Central Queensland is being developed by the new subsidiary.
Adani Solar is Adani Enterprises’ solar PV manufacturing and EPC business. It will be India’s largest integrated solar cell and module factory by November 2020.
Adani Road Transport
Adani Road Transport is a company that builds, operates, and maintains roads, highways, expressways, and tollways. Andhra Pradesh, Chhattisgarh, Gujarat, Kerala, Madhya Pradesh, Odisha, Telangana, and West Bengal have NHAI projects. It was awarded the concession to develop a 464-kilometre segment of the 594-kilometre Ganga Expressway in Uttar Pradesh in December 2021.
Adani Water is a water company owned by Adani Group
It was established as a subsidiary in December 2018, focusing on the construction of water infrastructure. Under the National Mission for Clean Ganga Framework, it actively works on wastewater treatment, recycling, and reuse projects in Prayagraj.
Welspun Exploration Adani
The Adani Group (through Adani Enterprises) and Welspun Enterprises have a 65:35 joint venture called Adani Welspun Exploration. It works in the oil and gas industry.
Adani Wilmar is a food processing firm founded in 1999 as a joint venture between Adani Enterprises and Wilmar International. Adani Wilmar’s flagship brand “Fortune,” under which it produces and sells edible oil, flour, rice, pulses, sugar, soya nuggets, and quick meal mixes, was launched in November 2000. Under the “Alife” brand, the company also produces personal care items such as soaps, handwash, and hand sanitisers.
The rapid rise of Gautam Adani
He built a collection of seven publicly traded companies with a combined market capitalization of $153 billion in barely three decades. Adani Wilmar, an edible oil company, became the group’s seventh company to list on public exchanges on the 8th of February. Adani travelled to Mumbai at the age of 16 to try his luck in the diamond trade before returning to Gujarat to help run his brother’s plastics industry. The Adani Group was founded in 1988 when a 59-year-old college dropout founded Adani Enterprises, the group’s flagship company, to import and export commodities.
The firm has become noted for its scope and execution, with a basic ideology of ‘nation-building.’ It has expanded into over a dozen enterprises, many of which are among India’s largest.
The following is a list of the company’s seven listed companies.
With 13 ports and terminals throughout India’s eastern and western coastlines, Adani Ports and Special Economic Zone is the country’s largest private port operator.
Adani Enterprises is India’s largest coal trader, coal mining contractor, and private airport operator, with a total of eight airports under its belt. Because it invests in capital-intensive industries, the company’s growth has been fueled by debt. The listed group companies’ total outstanding debt is projected to be $20 billion.
There are also concerns about whether some of the group companies’ valuations are approaching bubble territory. The group’s public equities, excluding Adani Wilmar, have a combined trailing 12-month revenue of $14.5 billion but a profit of only $1.14 billion. However, the combined market value of the six stocks is $148 billion, raising doubts about whether the stock prices are disconnected from fundamentals.
Regardless of valuations, Adani’s current drive into green energy has been the most significant contributor to his wealth increase. Adani Green Energy’s stock has risen over 5,500 per cent in the last three years, and it now has a market capitalization of $40 billion, making it the group’s most valuable company. Whether or whether the values can be sustained relies on Adani’s track record of entering promising areas at the right time while pursuing his high digital and renewable energy goals.
The Adani Group has inked a Memorandum of Understanding (MoU) with the Sri Lankan government for the development of two large-scale renewable energy projects in the neighbouring country. Although neither the Adani Group nor the Sri Lankan government has confirmed the two projects, it has been rumoured that they will be based in Mannar and Pooneryn in the Northern Province.
According to reports, a senior official in the State Ministry of Solar Power, Wind and Hydro Power Generation Projects Development has also confirmed the signing of agreements between these parties for the two RE projects in Mannar and Pooneryn. Gautam Adani, the chairman of the Adani Group, recently met with Sri Lankan President Gotabaya Rajapaksa on his visit to the island nation. Meanwhile, a corporate team had visited the Mannar district to investigate the area’s wind energy potential.
About Mukesh Ambani
Mukesh Dhirubhai Ambani was born on April 19, 1957. He is an Indian businessman who is the chairman, managing director, and major shareholder of Reliance Industries Limited (RIL), a Fortune Global 500 company and India’s most valuable firm by market value. Ambani’s net worth is predicted to be over US$93 billion as of March 2022, according to Forbes and Bloomberg Billionaires Index, making him the second richest person in Asia and also India and the 11th richest person in the world.
Seven companies owned by Mukesh Ambani’s Reliance Industries Limited
It is a division of Reliance Industries Limited and an Indian retail enterprise and was founded in 2006 and is India’s top retailer in terms of revenue. Foods, groceries, garments, footwear, toys, home improvement products, electrical goods, and farm implements and inputs are all available at its retail locations. The company sells products through its e-commerce channels in addition to its physical locations. Reliance Retail has around 45 businesses and divisions.
Reliance Jio Infocomm Limited
It is a telecommunications company based in India. Reliance Jio, which launched its 4G network and fibre service in 2015, has grown to become one of India’s major mobile network operators, providing high-speed internet and network coverage across the country. Reliance Jio expanded into fibre-to-the-home services such as broadband, television, and gaming in 2019.
Reliance Life Sciences
It is a company that specializes in life sciences. According to their official website, Reliance Life Sciences is a research-driven company that specializes in biotherapeutics, pharmaceuticals, clinical research services, regenerative medicine, and molecular medicine. Its main facility, Dhirubhai Ambani Life Sciences Centre, is spread on 20 acres in Navi Mumbai and is one of the world’s most varied life sciences campuses (DALC).
It is a telecommunications network that Reliance Industries Mukesh Ambani owns Network18 Media and Investments Limited, or Network18 Group, an Indian media corporation. According to the official website, it began as a private limited business in 1996, was converted to a public limited company in 2006, and was acquired by Reliance Industries in 2014. Forbes India, Moneycontrol, News18, Overdrive, and CNBC TV18 are just a few of the well-known publications under the Network18 umbrella.
It is a company that produces petroleum. Reliance Petroleum, one of the world’s largest petroleum firms, offers high-speed diesel, gasoline, auto LPG, lubricants, aviation fuel, and packed LPG to two-wheelers, planes, farm equipment, and heavy engineering vehicles.
Reliance Industrial Infrastructure Limited
It is a company that specializes in industrial infrastructure. Reliance Industrial Infrastructure Limited, one of the country’s leading infrastructure corporations, specializes in the construction and operation of industrial infrastructure, as well as the transportation of petroleum products, raw water, data processing, and computer software.
Football Sports Development Limited
It is a company that specializes in the development of IMG Reliance owns the Football Sports Development Limited (a collaboration between IMG and Reliance Industries). It owns the Indian Super League, the country’s premier football competition, which began in October 2014. Bengaluru FC, Chennaiyan FC, ATK Mohun Bagan, FC Goa, and others are among the league’s 11 football clubs. Reliance Industries also owns the Mumbai Indians cricket franchise.
Mukesh Ambani now plans to develop the megacity, an extraordinarily modern city near Mumbai, after gaining a solid position in networking. The city is expected to be full of interesting elements and thoroughly modern. Mukesh Ambani, along with his staff, is currently working on the company’s blueprint. This megacity will receive a $75 billion investment over the next ten years.
Reliance Industries, which serves as the special planning authority for this project, has given its approval. The project will be managed by Reliance Industries and will also be in charge of the city’s administration. It will reduce the amount of red tape, transaction time, and project cost. The Navi Mumbai Special Economic Zone owns around 4,300 acres of land in this megacity. The particular plot of land is linked to the Jawaharlal Nehru Port Trust and the new airport project.
With a preliminary payment of Rs 2,180 crores, Reliance Industries signed a mutual memorandum of agreement with the NMSEZ on the land lease contract as well as the development rights by March 2021. Megacity is a project which is being built by the private sector for the first time in modern India to meet the lofty aims of improving urban infrastructure.
Reliance signed a formal agreement of understanding with the Maharashtra government to build a global economic hub. In the form of a global alliance, this would also include the world’s top integrated digital as well as the services industrial fields.
By devouring smaller and weaker enterprises similar to their operations, the two superstar corporate groups are indeed diminishing the competition intensity in the larger economy. Despite these, all indications point to a heated rivalry between them. Ambani used these telecom roads to become the czar of India’s consumer data; Adani wants to enter from the other end by providing green energy-powered storage services for bits and bytes. He is in a fierce battle for control of the supermarket supply chain with Amazon.com Inc. Adani controls India’s Number one edible oil brand and stocks grain for the government-run Food Corporation of India.
Analysts tend to group Adani and Ambani together as if they were a duopoly in India. Recently, the economist Arvind Subramanian, an adviser to the Modi administration until 2018, and Josh Felman, who is a former International Monetary Fund official in New Delhi, wrote about how the government is encouraging an extraordinary concentration of economic power by backing the “2As” at the expense of other companies whether domestic or foreign.
In the year 2018, Aramco and Adnoc announced plans to build a $44 billion refinery in partnership with state-owned Indian companies. That proposal fell through after the project’s intended location of the project in India’s Maharashtra state was lost due to local political opposition. Is it possible for the Adani Group to resurrect the project?
According to Bloomberg News, the preliminary negotiations with Aramco appear to have a modest focus for now as a partnership in renewable energy, crop nutrients, or chemicals. If Aramco will remain interested in controlling a captive refinery in India, the terms of its Adani cooperation could change. The largest crude oil producer in the world, Saudi Aramco, is still a better fit for Ambani’s Reliance, which controls the world’s largest refining complex in Jamnagar, Gujarat.
Polyester, polymers, and fibre-intermediates are also produced by Reliance. But also, Adani has hoped to go into the petrochemicals business by partnering with BASF SE, Borealis AG, and the Abu Dhabi National Oil Company, or Adnoc, to build a dollar 4 billion acrylics complex near his Mundra port in Gujarat. The scheme was thwarted by Covid-19. This was not his first foray into the petrochemical industry: a project in Gujarat that was supposed to bring in Taiwan’s CPC Corp also fell through.
Coal remains Adani’s primary interest in hydrocarbons. He mines it in India and Indonesia, uses it to generate electricity at plants like the one in Mundra, and berths ships loaded with it at his massive network of ports. After a decade of wrangling over the environmentally problematic Carmichael mine in Australia’s Galilee Basin, the firm announced in December that coal exports would begin soon. However, while coal is an integral part of India’s past and present, it is not the future. That is why Adani has placed a large stake in solar energy. He began to circle plastics as well.
After fixing a replacement petrochemicals business last year, it became evident that Adani would attempt to break through the rival group’s cash-flow moat constructed by Dhirubhai Ambani, India’s “Polyester Prince” (and father of Reliance’s current CEO). The fascinating question is if Adani’s plans involve the construction of a refinery.
This would put the billionaires against one other – not for the first time. In the month of June of last year, Ambani told his shareholders that he was beginning the “most difficult” task of his life by switching to clean energy and fuel. He was followed up with a blitzkrieg of field purchases. Prior to this, Adani had set a goal of being the world’s largest renewable energy generator by 2030.
He put Reliance in the lead role in India’s climate-change storey by disclosing his plans for four gigafactories in Jamnagar, one each for solar panels, batteries, green hydrogen, and fuel cells. He did so two days before the COP26 meeting in Glasgow, where Prime Minister Narendra Modi made a bold vow to reduce India’s Reliance on fossil fuels.
Their financial statements differ. Firms affiliated with Adani have been hyperactive in the international loan market for the past five years, borrowing more than any other Indian corporation. At the same time, Ambani has transformed Reliance into a low-leverage fortress, which is a good thing when global interest rates rise. The visions also differ.
While Adani provides grid power to households (along with cooking gas through a partnership with TotalEnergies SE of France, Ambani, who is five years older, envisions a future during which “every farm, house, factory, and habitat could, in theory , free itself from the grid by generating their own power.” Will the two billionaires attempt to modify policies and influence politics to realize their own aim? Yes, of course.
Edited by Prakriti Arora