Why Indian billionaire Gautam Adani is unstoppable: Know his 7 wealth drivers

Gautam Shantilal Adani’s wealth journey started at the age of 18, after he quit college to become a diamond sorter. At age 20, having quickly learnt the tricks of the trade, Adani was already a millionaire. Along the way, he encountered speed bumps: a kidnap-for-ransom gang grabbed him in 1997, and then was held hostage at the Taj Mahal Palace Hotel in the Mumbai terror attacks in 2008.

He takes them all in good stride. In 1988, he established Adani Exports Ltd (now Adani Enterprises), dealing initially with agricultural commodities and power. He has since expanded his business empire.

Now 60, Adani is at the helm of India’s biggest business conglomerate. In the last 12 months, his wealth made a stratospheric rise, seeing his net worth rocket past $153.5 billion, just behind Elon Musk ($277.1 billion net worth) on the Bloomberg richest list.

Proud Indian, thriving in uncertainty

Adani’s biggest asset: his ability to thrive amid uncertainty. He has the knack for hiring competent manager and energising them to carry out his vision. His Twitter handle simply states: “Proud Indian. Excited to be part of the India growth story!“

And what better way to grow a country than to get a grip on the basic building blocks: the Adani Group is set to become India’s second-largest cement maker, with the acquisition of Holcim’s stakes in Ambuja Cement and ACC Ltd.

How he got to No. 2 richest spot

It’s the stock market. Adani's stakes in several of India’s top-performing industrial leaders gave a big push for his net worth upwards in the last few years. For example, from 2020 to 2021 Adani Enterprises Ltd (AEL) — the his flagship company — has seen its value rise almost 846.27 per cent.

From January till September 2022, AEL shares jumped an additional 122.40 per cent. It rose by whopping 164.94 per cent since September 2021 to September 2022 so far.

7 drivers of Adani Group

In the last 10 years, the Adani Group has expanded at breakneck speed, both organically and through acquisitions. His flagship, Adani Group, currently comprises seven listed entities spanning diverse sectors and employs more than 23,000 people. Get this: Adani Enterprises Ltd. stocks has grown by 60,065% since its listing in 1999.

These are some of the main engines of value creation for the group, with recent market performance on the Bombay Stock Exchange (BSE Sensex):

#1. Adani Enterprises Ltd (AEL)

Adani Enterprises is a holding company. It is mainly focussed in mining and trading of coal and iron ore on a standalone basis. It also acts as an incubator for Adani Group's new business ventures. Founded in 1988 and listed in 1994, AEL’s focuses on airports, roads, metros, rails, data centres, solar manufacturing, defence and aerospace, edible oils and foods, mining services, water, integrated resource solutions, and agro products. AEL has earmarked Rs55,000 crores (about $6.9 billion) on new energy, airport and road projects.

The stock has been rallying as it is expected to replace Shree Cements in the NIFTY 50 index on September 30, 2022.

#2. Adani Green Energy Ltd (AGEL)

Adani Green Energy Ltd (AGEL), develops, builds, owns, operates, and maintains utility-scale grid-connected solar power, wind power, hybrid projects, and solar parks. It is one of the biggest renewable energy firms in India. It has a current portfolio exceeding 20 GW, with plans to boost its installed capacity to 25 GW by 2025 and 45 GW by 2030.

Over the past 3 years, Adani Green has pulled off a return of almost 5,000%. Recently, Sri Lanka has approved AGEL’s investment of over $500 million in two wind projects. The company plans to build 3 “Giga factories” as part of its $70-billion push for greener power in India.

#3. Adani Ports & Special Economic Zone (APSEZ)

Adani Ports and Special Economic Zone Limited formerly known as Mundra Port and Special Economic Zone Limited, is India's largest private multi-port operator. Since it was founded in 1998, it has grown to runs 13 domestic ports, thus making it the largest commercial port operator in India, and accounts for nearly 25% of the cargo movement in the country. It is currently the most valued company in the Adani Group, and forms part of NIFTY50 index. Among all the 7 listed entities, it has posted the least growth, and posting a decent 29.4% rise in the last 12 months to September 2022.

#4. Adani Power Ltd (APL)

With a power generation magnitude of 13,650 MW, APL is India’s largest private thermal power producer. Adani Power’s thermal power plants are spread across Gujarat, Maharashtra, Karnataka, Rajasthan, and Chhattisgarh. APL has also diversified into solar power.

Starting at Rs100 at the beginning of 2022, the APL share price has soared to Rs. 397 now. The APL shares have surged 298% YTD and have generated over 560% returns in the past 3 years.

This rally can be explained in part due to the cooling of global coal prices and the revival of industrial and consumer demand. The company has grown immensely, as can be seen from its latest June quarterly results, where it posted a 17 times jump in net profit. APL is scheduled to be included in the MSCI India index.

#5. Adani Total Gas (ATGL)

The company was established as a joint venture between the Adani Group and France’s Total Energies. ATGL supplies piped natural gas connections to its residential, commercial, and industrial clients. It also supplies compressed natural gas to the transport sector.

With a presence in 74 districts, ATGL is India’s largest city gas distributor. ATGL is also foraying into electric mobility and has launched its first electric vehicle charging station (EVCS) in Ahmedabad, Gujarat.

ATGL has plans to expand its footprint, bagging 29 new locations in the auction for setting up new distribution networks. The ATGL share price has zoomed over 2,593% in the last three years.

#6. Adani Transmission Ltd (ATL)

ATL was spun off from AEL in 2015 and has since focused on Adani Group’s power transmission and distribution arm. With a 22% market share, ATL is India’s largest private-sector player in the transmission sector, a growth that came partly with the acquisition of GMR and KEC assets in 2016 and 2019.

Before the end of 2022, ATL targets to set up 20,000 circuit km of transmission lines. It market cap hit Rs4 trillion this year. With smart metres, analysts keep a positive outlook for the company. It has already generated returns of over 125% so far. ATL’s 5-year performance shot past 2,659%.

#7. Adani Wilmar

When Adani Wilmar was listed only early February 2022, the market gave it a rather cold reception, but the stock price has so far spiraled by 187%. The venture between Singapore’s Wilmar and the Adani Group is engaged in consumer food products — namely Edible Oil, Food & FMCG, and Industrial Essentials. Fortune Oil, India’s foremost edible oil, is its flagship brand.

Philanthropy

Adani Foundation, founded in 1996, is the corporate social responsibility arm of the Adani Group. It focuses on community health, education and infrastructure. During the height of COVID-driven crisis in India, the Adani Group purchased 48 oxygen-carrying tanks, 5,000 medical-grade oxygen cylinders and partnered with Linde and Air Products, building a capacity to carry 780 tonnes of liquid oxygen across the subcontinent.

The group is also one of India's top givers: it contributed Rs1 billion (100 crore; $13.7 million) to PM CARES Fund, and gave Rs50 million (5 crore; $689,000) each to Gujarat CM Relief Fund and Kerala CM Relief Fund, among others, Indian media reported. This year, the group has reportedly earmarked Rs60,000 crore towards charity.

(Note: This is neither a recommendation nor a stock market advice, and is only for purposes of information, based on publicly-available data).