Indian businessman ranks among the top three richest people in the world. How did he build his business empire?
In 2021, Adani’s wealth growth will rank first in India and fifth in the world, with a total increase of $42.7 billion; in February this year, Adani’s wealth surpassed India’s richest man Mukesh Ambani to become Asia’s richest man; in July he Overtaking Bill Gates to become the fourth richest person in the world, Adani’s assets rose to third in the world just over a month later. How did this “grassroots” businessman build a huge business empire?
Start as a diamond sorter
Adani was born in Ahmedabad, in the western Indian state of Gujarat, in 1962. The family lived off the textile business run by his father. According to his father’s plan, after graduating from Gujarat University, Adani should inherit his father’s business. Although he is keen on business, Adani has no interest in his father’s textile business. In 1978, the 16-year-old Adani decided to drop out of school and went to Mumbai alone to venture into the Nuggets.
Adani’s first job was a diamond sorter. After a period of time, the huge profits of the diamond industry and the meager income of the sorters made Adani see the business opportunities. After working for two years, Adani set up his own diamond trading company and made his first pot of gold. In 1981, Adani’s brother opened a plastics factory in Ahmedabad and invited Adani to manage the business of the factory. As a result, Adani returned to his hometown and officially started the pioneering road of Adani Group. In 1985, Adani began to undertake the import and export business of PVC from local small and medium-sized factories. In 1988, Adani established Adani Import and Export Company, which deals in agricultural products, plastic products and other commodities, and this company is the predecessor of the world-renowned Adani Group.
Money begets money
Adani’s business logic can be simply summarized as “money makes money”, that is, after earning money, the profit is taken to the bank to apply for a loan, and then invest in more industries. A previous report by the “Indian Express” quoted the head of research at Bombay Securities as saying that Adani entered almost all industries that were in the air at the right time, which successfully attracted domestic and foreign investors, and most of the industries Adani looked at It is capital-intensive, and the two hit it off, allowing Adani to expand smoothly.
In the 1990s, India set off a wave of domestic economic reform, and Adani, who had been snowballing for several years, ushered in important business opportunities. In 1995, Adani almost out of pocket, bought the port of Mundra, Gujarat’s largest commercial port. Since then, Gujarat has become a pilot area for India’s economic reform. Many import and export products need to pass through the port of Mundra.
The success of the bet on the port has led Adani to look for its next investment area, and this time, Adani has turned its attention to more big industries. Since 1996, Adani has gradually expanded its business to coal power, grain, oil, photovoltaic power and other fields. Thanks to its near-monopoly position in key areas such as ports, transportation, resources and energy, during the epidemic, Adani’s assets skyrocketed. According to the Indian Express, from the beginning of 2020 to the end of January 2022, “Adani Green” and “Adani Green”gasThe stock price of “Adani Group Corporation” rose more than 10 times; the share price of “Adani Group Company” rose more than 7.3 times; the share price of “Adani Transmission” rose more than 5 times; “Adani Port” rose 95%. The first billionaire with a fortune of more than $100 billion.
At present, Adani Group owns 7 civil airports and nearly a quarter of the air traffic business in India, including India’s largest private airport operating company, power supply company and city gas retail company. It is no exaggeration to say that the basic necessities of most Indians are controlled by the Adani Group.
Homesickness raises doubts
Adani’s success is inseparable from one person – his fellow countryman, the current Prime Minister of India, Narendra Modi, and the relationship between the two has always been the focus of Indian public opinion, and many of them have been questioned. When Modi was the chief minister of Gujarat, Adani invested locally; when Modi delivered speeches all over India, he took Adani’s private jet; Modi emphasized the path of green and sustainable development, and Adani responded immediately, promising to 2025 Increase the Group’s renewable energy production capacity by nearly 8 times in 2018. According to the “Indian Express” report, because of Adani’s close relationship with Modi, Modi’s political opponents believe that Modi is “nepotism”, while Adani believes that these accusations are “baseless” and that his success is related to Modi. Dee’s proposed national strategy coincides with the results.
In addition, Adani Group’s debt problems have also caused market concerns, and a report by credit research agency CreditSights shows that Adani Group has “severely over-leveraged” problems. The report noted that Adani’s “acquisition boom is largely supported by debt financing, but debt may become a risk in the face of higher market interest rates and longer payback cycles for some infrastructure projects”.