They could also have political resonance given Adani’s long association with the prime minister Narendra Modi. The two became close during the Hindu nationalist leader’s tenure as chief minister of Gujarat, Adani’s home state.
A ‘survivor’
The self-made billionaire has had a more dramatic life than most after surviving an attempted kidnapping for ransom in 1998 and the 2008 Pakistani terror attack on Mumbai’s Taj Mahal Palace hotel that left more than 160 people dead.
The stout, mustachioed Adani escaped the bloodshed by hiding in the hotel basement. Those experiences, friends say, have given him a “survival instinct.”
Adani, 60, was born in Gujarat’s commercial capital Ahmedabad in a family of eight. His parents were Jains, a religion known for its non-violent faith and simple lifestyle. Jains do not drink, smoke or eat meat and are considered business acumen, hard working and extremely sincere in their dealings.
Indian conglomerate Adani Group, led by billionaire Gautam Adani, has lost billions after criticism by US short-seller Hindenburg Research sent shares of its companies plummeting. Photo: Reuters/File
Adani’s father was a middle-class textile merchant. Adani, who calls being an entrepreneur “my dream job,” dropped out of school at 16 to sell diamonds in Mumbai and went on to run his brother’s plastics factory when he was just 20. From there, he built his own business and branched out into commodity trading.
In the late 1990s, he won the right to operate India’s main Mundra port. Then he made his big move into fossil fuels, building a coal “pit-to-plug” power supply giant.
His group’s flagship, Adani Enterprises, became an incubator for his businesses that were spun off when they could stand alone. The conglomerate’s footprint now stretches across India’s economy. It owns the country’s largest private port and is the largest private producer of thermal electricity and one of the leading private airport operators.
Green pivot
For the man known as India’s “coal king”, Adani is now aiming to become the world’s largest producer of renewable energy and has a portfolio of projects in cement, defence, data centres, semiconductors and media.
Until recently, however, Adani was overshadowed by the other big “A” in India’s corporate world: Mukesh Ambani, which controls Reliance Industries, another multinational conglomerate. But in February 2022, Adani overtook Ambani as Asia’s richest person. Forbes pegs Ambani’s fortune at US$86.5 billion, placing him ninth in the global wealth stakes.
Adani says financial growth is assured when a company’s strategy is aligned with national interests, and over the past decade, synchronizing his corporate goals with the government has served him well.
His guiding principle is “nation building” and self-reliance, the same patriotic themes Modi emphasizes. Certainly, no other businessman has ever been so tight with Modi. After his sweeping election victory in 2014, Modi arrived in New Delhi aboard an Adani private jet.
But Adani insists Modi has done him no favors and expects none. Adani biographer RN Bhaskar wrote that it has been Adani’s “ability to build” relationships across the political spectrum that has fueled the group’s growth. Opponents, however, say Adani has benefited from “crony capitalism” thanks to his New Delhi connections. That talk has increased since the Adani Group won the bid to run six airports in a government privatization in 2020, despite no previous industry experience.
The relationship between Indian Prime Minister Narendra Modi, (pictured) and Asia’s richest man Gautam Adani has been in the spotlight Photo: AFP/File
Aggressive expansion
The other factor driving the group’s growth is Adani’s fearless appetite for debt-fueled expansion. Adani borrows money based on its own businesses to establish new ones. “Either you’re sitting on a pile of cash or you’re continuing to grow,” he said.
It is the aggressive, debt-driven growth that has triggered the greatest concern. In 2015, Credit Suisse described the group as a “House of Debt”. Last August, CreditSights, a fixed income research firm owned by Fitch Group, called the group “deeply overvalued”.
But the Hindenburg report is the hardest hit so far. It claims the group’s use of “extreme leverage” leaves it on a “precarious financial footing”. The conglomerate has repeatedly said its debt levels are “healthy” and that it has been “consistently” brought down.
Adani and his family own up to 75 percent of the group companies. The family also dominates the firm’s top management, creating what Hindenburg calls a “ripe environment for unilateral and opaque financing decisions.”
The Hindenburg report accuses the group of using an extensive offshore shell company network for earnings manipulation and to inflate share prices, allegations which Adani also denies.
Hindenburg, which has revealed it has taken a “short position” in Adani companies, meaning it would gain from a fall in their value, has invited the group to sue the firm over the report.
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‘Extraordinary’ growth
Adani’s personal wealth has been turbocharged by the astonishing share price growth of the group’s seven key listed companies, which have risen an average of 819 per cent in three years.
He added more than $100 billion to his fortune during the same period. “His accumulation of wealth is extraordinary,” James Crabtree, head of the International Institute for Strategic Studies in Asia, told CNN. Hindenburg’s report stated that infrastructure companies are generally “low growth”, but compared Adani’s company valuations to “high growth technology companies”.
Adani’s defenders say India needs a hard-nosed, shrewd businessman like Adani who can cut through the country’s notorious bureaucracy and access global capital to build infrastructure and boost economic growth. Adani’s alignment of its corporate goals with Modi’s development goals could help the group weather the storm if investors choose to focus on long-term prospects, analysts say.
Adani’s “infrastructure play as well as new energy additions” serve as “proxies for India’s growth,” said Geetanjali Kedia, analyst at brokerage SP Tulsian. All is well as long as Modi remains in power and Adani’s companies generate enough cash to service the debt, so the argument goes.
Adani says business is about “dealing with uncertainties and turbulence”, qualities he may be tested on in the coming days and weeks.
