Here’s All You Need To Know About Adani — Who Beat Ambani In The Race To Be The World’s Richest Man

How did Gautam Adani go from $10 billion to $147 billion in two years?

Gautam Adani is the first Asian to rank in the top three in Bloomberg’s Billionaire Index. He surpassed LVMH Chairman & CEO Bernard Arnault ($138 Billion). Adani, with a total wealth of $147 Billion trails Tesla CEO Elon Musk ($264 Billion). But how did Gautam Adani accomplish this feat? Mukesh Ambani was the one to watch when India went into pandemic lockdowns, but things changed rapidly for Gautam Adani. Before Covid hit, Adani’s wealth was $10 Billion, whereas Mukesh Ambani’s wealth was $59 Billion, over six times that of Adani.

Adani is now worth $147 Billion, whereas Mukesh Ambani is the 10th richest person, with $88.7 Billion.

Bloomberg’s Billionaire Index

Adani has added $60 billion to his riches in 2022 alone, five times more than anyone else — while Adani added $49 billion, or Rs. 6000 crores per week, according to sources, in 2021. He is the only Indian to have established not one, but five enterprises with a market value of one lakh crore (13 billion USD).

Adani’s wealth has nearly doubled in 2022, from $77 billion at the start to $149 billion presently.

World’s Top 10 Richest People

Name Country Wealth
1 Elon Muk USA $264B
2 Gautam Adani India $147B
3 Jeff Bezos USA $147B
4 Bernard Arnault France $138B
5 Bill Gates USA $112B
6 Warren Buffet USA $96B
7 Larry Page USA $94B
8 Sergey Brin USA $90B
9 Larry Ellison USA $89B
10 Mukesh Ambani India $88B
Source: Bloomberg

Gautam Adani’s networth was $10 billion in 2020 and is now $147 billion – an almost 1500% increase in less than three years. He is presently the world’s third richest man and Asia’s richest. Adani was not even in the top 10 richest Indians in 2014… But HOW?

This is due to the fact that Adani Group stocks have been on a tear since 2020. Since 2022, the market capitalisation of all 5246 BSE-listed companies has climbed by $165 billion. Just the seven Adani Group enterprises contributed $131 billion. The share price typically rises in proportion to an increase in revenues or profitability — however, the Adani group’s stock price has soared, backed by heavy debt.

Adani Power 951%
Adani Enterprises 1340%
Adani Green Energy 645%
Adani Transmission 1325%
Adani Total Gas 2040%
Adani Ports 250%
Adani Wilmar 173%
Change In Share Prices Since August 2020

The entire debt of Adani Group is $29 billion, which is supporting Adani’s acquisition spree:

Adani Group’s Top acquisitions:

  • Ambuja & ACC Cements — $10.5 billion
  • 4 Ports — $4.4 billion
  • SB Energy Limited — $3.5 billion
  • Mumbai International Airport Ltd. — $219 million

But who is giving loans to Adani? Where is the money coming from?

  • 48% from bonds
  • 20% from PSU banks
  • 7% from private banks
  • 15% from other sources

Adani Green — Asia’s most dangerous stock: A healthy debt-equity ratio is less than 1. While Adani Green’s is 20.21. Furthermore, Adani Green has projected a $ 70 billion investment to become the world’s largest renewable energy producer and such goals, together with tight links to Prime Minister Narendra Modi & the govt, might give Adani a boost.

But What if, things go wrong?

Adani Group’s debt currently amounts to 1% of India’s nominal GDP. The company has grown too large to fail. However, even China’s Evergrande Group had a debt level of 2% of nominal GDP only.

Narendra Modi and Gautam Adani
Narendra Modi & Gautam Adani Boosting India’s Exponential Growth

What is driving Gautam Adani’s meteoric climb from college dropout to first-generation entrepreneur and world’s second richest man? We DKODE

Adani, 60, dropped out of college in the early 1980s to work in the diamond sector in Mumbai before moving on to coal and ports. His business has since grown into industries ranging from ports, airports to city gas distribution and coal mining, as well as data centres, cement, media, and green energy. Surprisingly, Adani Group has announced the acquisition of a 29.18% stake in NDTV.

Gautam Adani is now worth $147 billion — India’s 2021 GDP was $3173 billion. Adani’s net worth is equal to 5% of India’s GDP.

Gautam Adani speaks on the Adani Group becoming India’s 2nd largest cement manufacturer | Video Credit: Adani Group

Not one, but all Adani Group stocks are performing strongly in the market. Is the bubble getting bigger?

  • The skyrocketing share prices of billionaire Gautam Adani’s public companies have propelled him into the top three richest people in the world.

Let’s see how his group of companies fared in the stock market. The Adani Group is comprised of seven publicly traded companies. Since 2020, shares in Adani Green and Adani Total Gas, a joint venture with a French corporation, have increased by more than 1000%. Since 2020, Adani Enterprise has grown by more than 1400%.

Adani Group Companies At A Glance | Image Credit: DKODING Studio

Furthermore, Adani transition has increased by more than 1000% and Adani ports by 120% during the same time period. Gains from Adani total gas were the greatest, with investor wealth increasing about 1900% from January 2020. In comparison, the benchmark 30 share BSE Sensex gained only 40% throughout the same period. Adani Wilmar, the most recent Adani stock to be listed, gained 157% on its debut in February of this year.

Original Illustration By BQ Prime | Redesigned By DKODING Studio

As the Indian business tycoon momentarily became the world’s second richest person, most of his group firms’ share values increased by more than 100% in the last one year. Adani Power Ltd.’s share price increased 293% in a year, followed by Adani Wilmar Ltd.’s share price increasing 214%. Meanwhile, Adani Group’s flagship company, Adani Enterprises Ltd., has seen its stock price climb by 24% in one’s month time.  However, Adani Ports & SEZ Ltd., a Nifty 50 firm, has been the group’s weakest performer, with only a 22% increase in share price.

The Adani Group is comprised of seven publicly traded companies. Gains from Adani Total Gas were the greatest, with investor’s wealth increasing about 1900%.

It remains to be seen whether the tycoon can keep his third-place ranking. Analysts have expressed alarm about the amount of debt his company has incurred as it has grown. Furthermore, a rise in the stock values of firms such as Arnault’s LVMH or Gates’ Microsoft may cause Adani to slip out of the top three.

According to Forbes, Adani’s success stems from his ambitious growth strategy in renewable energy, airports, and media enterprises. The industrialist has stated that he will focus on renewable energy and plans to invest US$70 billion in the field. According to Forbes, Adani’s wealth surged significantly during the Covid-19 pandemic, after he purchased big investments in Mumbai International Airport and Softbank’s renewable energy company in India.

Adani’s debt continues to climb rather than decrease despite being the world’s second-richest person — why?

  • Despite being ranked as the world’s second-richest man, Indian tycoon Adani is deeply involved in a multi-million dollar debt crisis that has left him facing questions?

The CreditSights report raises a number of credit concerns about the Adani Group. The majority of the group’s growth is financed through debt capital markets, internal accumulated expenses, and bank loans. Since 2012, loan defaults or bad loans have multiplied by 10%.

The CreditSights report raises a number of credit concerns about the Adani Group, ranging from its overly-leveraged fast expansion to excursions into new and related businesses to the risks associated of heavily competing with giants like Reliance Industries.

Company Revenues Debt
Apple $387b $94b
Amazon $469b $58b
MIcrosoft $168b $47b
Adani Group $30b $28b
Revenues vs Debt for Anaysis

Adani Group’ debt to capital ratio is 95% as level that is on the higher side for a private company.

It further raises the worst-case scenario likelihood of the group’s “overly-ambitious debt-funded growth ambitions” eventually spiralling into a major debt trap, potentially resulting in a distressed position or default of one or more Adani group companies.

The group’s debt levels may have gone up, but the cash flows for the group have also grown steadily, with more assets coming on stream and becoming operational.

— Analysts

The six listed Adani group firms had a gross debt of Rs 230,900 crore as of FY22-end

Adani Leverage | Six Group Companies Net Debt

After being the world’s second-richest person, Adani’s debt continues to rise rather than reduce. Why is he not repaying his loans? Despite serious debt traps, Gautam Adani has been on a dealmaking rampage in recent years. The majority of the group’s growth is financed through debt capital markets, internal accumulated expenses, and bank loans. Since 2012, loan defaults or bad loans have multiplied by 10. Indian public sector banks make 95% of these loans. While SBI is alone in responsible of 30% of issuance. 

Gautam Adani’s overly ambitious expansion plans, according to CreditSights, may lead to a big debt trap. In a number of businesses, the Adani Group competes with Mukesh Ambani’s Reliance Industries. According to Credit Sights, Reliance Industries is deleveraging, whilst the former is highly leveraged. According to a report, Adani Group is in debt to the tune of $2.6 trillion and as per the World Bank, India’s GDP is $3.17 trillion (2021).

The Adani group’s overall debt climbed by 40.5% to just over Rs 2.21 lakh crore during fiscal year 2021-2022. In the previous fiscal year, it was Rs 1.57 lakh crore.

According to a Bloomberg analysis, one of the reasons Adani has been able to overtake some of the world’s richest billionaires this year is that some of the wealthiest people in the US have upped their philanthropy. While Warren Buffett has previously contributed more than $35 billion the Bill & Melinda Gates Foundation, Bill Gates announced in July 2022 that he will contribute $20 billion to the organisation.

Gautam Adani and Mukesh Ambani
Gautam Adani & Mukesh Ambani Leading India’s Growth Story

Closing Thoughts:

Mukesh Ambani’s emphasis on telecom, retail, and green energy; Anil Agarwal’s emphasis on metals and semiconductors; and Gautam Adani’s emphasis on power, ports, and infrastructure all contribute significantly to India’s emergence as a developed nation.

Having said that — Adani has definitely mastered the art of integrating BIG Future Investments with BIG Govt. Plans and he has the might to affect central government decisions due to his huge influence and network. On the other side — The Indian government too believes that Adani’s recent developments in all fields are vital to the country’s growth.

Beyond the political connections of home, Gautam Adani confronts an uphill task in competing with the likes of Jeff Bezos and Elon Musk in building a powerful global empire. Please add your thoughts in the comment page.

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