‘God Mode’: Like an invincible gamer, Gautam Adani’s rise as a global industrialist parallels that of India

He’s into ports, airports, energy and defense. His foreign forays echo PM Modi’s diplomacy. His ambitions know no bounds – despite recent legal troubles in the US

The growth of Gautam Adani’s businesses is now of interest to almost every nation. The low-profile Indian industrialist climbed into the global list of the ultra-rich and despite hurdles is likely to remain there. At home, he is perceived to be close to Prime Minister Narendra Modi, and it is hard to shake the perception that many of Adani’s foreign projects are closely linked to Modi’s foreign policy initiatives. 

Interest in the billionaire has spiked following an indictment and a civil case in the US last month. One of his group companies, Adani Green Energy, a renewable energy arm of the conglomerate operating a solar and wind portfolio of 10,934 MW, the largest in India, wanted to raise $600 million through bonds in the US markets. Following the indictment, the company withdrew the offering.

US law enforcers have charged Gautam Adani, his nephew Sagar Adani, and a company executive as well as other people linked to the conglomerate with bribing Indian officials for favors to Adani Green and for duping investors. The result was that Adani’s shares and market cap took a nosedive in India, one of the world’s ten largest securities exchanges.

Gautam Adani shrugged off the charges of plying Indian officials with $265 million in bribes with the affirmation that “…every attack makes us stronger.”

Indian retail investors still love him. They have been oversubscribing to each of his initial public offerings since 1988. But the charges in the US came more than a year after Adani Group companies had taken another big hit. 

In 2023, US-based securities shorting firm Hindenburg released a public report with several allegations, including that Adani Group had manipulated accounts, and accusing it of pulling off “the largest con in corporate history.” Stock prices plummeted, punters pulled out, and when the value was low, many climbed right back in for the ride.

Adani Group is not very public about its affairs, staying out of the public glare. The other big billionaire, Mukesh Ambani, recently had a very public, lavish wedding for his son. Global and home-grown stars, politicians, world leaders, Elon Musk, Mark Zuckerberg, and the Kardashians – a guest list that made sure every corner of the world knew that one of India’s richest families was celebrating a wedding in the family. The Tata family – a legacy Indian industry group with interests in mining, automobiles (including Jaguar-Land Rover), airliners, infra, defense and others – also keep to themselves, although boardroom spats have spilled out into public domain.

The elephant in the boardroom 

After a brief stop in Mumbai during his youth, Gautam Adani returned to Gujarat in the 1980s to build on his brother’s plastics business. He launched a trading corporation called Adani Exports (now Adani Group) and listed it on the Bombay Stock Exchange in 1988. Since then, he has kept the reins of the enterprise in his hands and those of close relatives. 

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Adani’s business calls have turned into gold, both in India and abroad, adding to investor confidence in his group, which has built businesses in infrastructure, mining, energy, digital and agro, amongst others. Much of his ventures appear to target being the biggest or largest in their genres. 

Most of the domestic controversies around Gautam Adani stem from an old friendship with Indian Prime Minister Narendra Modi. The relationship has been in place at least since Modi was chief minister of the western state of Gujarat, and continued as Modi hitched a ride on the billionaire’s private jet on the way to being sworn in as the Indian prime minister in 2014 – a position he continues to hold, past two more countrywide elections.

However, as Adani has himself pointed out, his company’s fortunes began before Modi was even a contender to become chief minister of Gujarat. Following the listing of his exports firm, Adani won the bid for a private port on the Gujarat coast in 1990. It would become India’s most successful privately owned port. 

Expansion

Adani’s expansions came rapidly through the 1990s and the 2000s, soon after India’s economy was liberalized in the early 1990s. The expansion policy of the group seems to follow a pattern of venturing into businesses linked to their existing enterprises. 

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To illustrate, Adani launched his own export firm, saw the profits of ports that handled the cargo that he and other traders passed through them, and got into the ports business. By the late 1990s, India started upping its power generation to cater to the growing industrial demand, following liberalization. That meant more coal, which was passing through ports, including his. Gautam Adani also invested in the coal trade in 1999. 

The same year, the Adanis also launched Wilmar, their FMCG brand, for pretty much the same reasons, beginning with cooking oil and building a large enterprise that created an organized distribution network for agricultural produce. 

By 2010, he had another port in India and was eyeing others, and acquired coal mining rights in Odisha state. The next obvious thing to do was to add power generation to his portfolio. After all, Adani was already dealing in coal. The carbon offset for the thermal power generation necessitated green alternatives and hence, Adani Greens, the company indicted in the US. 

Days after Modi was sworn into office in 2014, Adani became India’s biggest private power generator, but Modi didn’t have much to do with it. The Bharatiya Janata Party (BJP) leader had only just assumed an office that had been held by his rival political party, the Indian National Congress (INC).

A few months later, Modi was speeding up an order for French fighter jets in Paris. Adani was close by, spotted rowing a boat with a friend and his bodyguard on a Parisian lake. The purchase of the Rafale jets came with offsets for Indian corporations, but it went to an Adani competitor, Anil Ambani (the younger brother of Mukesh), who has since gone broke.

Adani Group has a small defense portfolio, which the company has indicated that it will expand in the coming years. For now, it is making drones and counter-drones, small arms like handguns, self-loading assault rifles, LMGs, and sniper rifles. It has launched a new ammunition factory, tied up with foreign countries for defense projects and is looking into more avenues for defense, especially in the aerospace vertical.

India’s newest Mr. Big

The political opposition to Modi do not like the Adani Group because of its founder’s proximity to the prime minister. They have made frequent public comments and accusations that Modi and Adani enjoy a mutually beneficial relationship.

Chief amongst Modi’s critics is Rahul Gandhi, who heads the INC. Yet, Adani recently contributed 1 billion Indian rupees (around $11 million) for a skill development institute in a state that is ruled by Rahul Gandhi’s party.

There are other opposition party leaders who have also given contracts to and boosted Adani’s expansions. A large section of the BJP’s public followers favor free markets and see Adani and his companies as an enabler of those aspirations. 

The securities market punters love Adani. A retail investor remarked that he “is playing in ‘god mode’, he will survive,” a gaming reference used by millennials.

Adani’s expertise in infrastructure building, both domestic and foreign, is closely linked to India’s expansion of its soft power aspirations. 

His group runs India’s current biggest port at Mundra in Gujarat. The newest at Vizhinjam in Kerala, in the south, has just become partly operational and could claim much of the traffic between the Arabian Sea and Indian Ocean, covering territory between Africa and West Asia. He has 11 other ports around the country’s east and west coasts, part of the Modi government’s ambitious project to build a necklace of ports and terminals along the entire Indian coastline that could become a key driver of its economy.

This is especially important as India pitches itself as a serious contender for American outsourced manufacturing in place of China, especially as US President-elect Donald Trump returns to the Oval Office next year. 

The competition with China extends further. Despite India losing favor in Sri Lanka, the new Leftist government in the island nation has not canceled a port project in Colombo with Adani. A wind power project for $736 million was not that lucky, the incoming leftist coalition had vowed to cancel it as an election promise.

This network of ports creates sea links through West Asia through the Haifa Port in Israel, to two port projects in Tanzania that Adani is developing, and the ultimate destination is Europe. There is speculation in the Indian media of a possible Adani port in Greece.

On the eastern side, Adani Group has plans to invest in Vietnam and is in talks with Indonesia for another port.

Tumble Down

Adani Group began coal mining operations in Indonesia in 2006 and moved further eastward to Australia. There, it bagged the Carmichael coal mine in 2010 and a 99-year lease for the Abbot Point port. This project later became controversial with accusations that an Adani company had allegedly harmed the Great Barrier Reef in Australia. It sparked off international journalists’ and activists’ interest in the Adani Group.

Closer to home, Adani Group has a growing footprint in South Asia. Apart from the Sri Lankan projects, it is looking at possible airport and hydro-energy projects in Nepal. It connected an Indian power generation plant to supply electricity exclusively to Bangladesh during the Sheikh Hasina-led Bangladesh government’s tenure. 

India fell out of favor with Bangladesh after the Hasina government fell, and weeks later, Adani Power handed a bill for $500 million to the interim, Yunus-led administration.

The Colombo port’s development is financed by the US International Development Financial Corporation. Following the US indictment of Adani, the fate of the promised $553 million is uncertain. With its experience of running eight airports (and developing some of them) in India, Sri Lanka also asked Adani Group to operate three airports in Sri Lanka.

Adani Ports spent between $120 million and $190 million to build a port in Myanmar’s capital, Yangon. In 2021, after the military coup, the Adani Group company decided to exit the project, which could have earned it sanctions for dealing with the economic arm of the sanctioned Myanmar military junta government. In 2023, Adani sold the port for $30 million.

In Africa, Tanzania is also discussing a $900 million deal with the Adani Group for high voltage transmission lines, apart from the two ports.

Adani was not that lucky in Kenya, where the Supreme Court stalled a $736 million deal for power lines. Kenya is an old US ally and following the recent indictment, the Kenyan president canceled the power line deal and talks to modernize its international airport for nearly $2 billion.

Faith in Adani 

Market watchers and analysts are reticent to make overt endorsements in favor of the Adani Group. But, some of the institutions have made statements to reassure investors. 

India’s oldest and premier rating agency, Crisil, issued a statement continuing its earlier positive ratings of the Adani Group.

“Based on management and select lender feedback, CRISIL Ratings understands that these developments have not led to any negative actions so far by lenders/investors, such as acceleration of debt repayment or spread resets,” said a CRISIL statement issued on November 29, adding that “The issue at hand is sub judice and CRISIL Ratings understands that Adani Group has sufficient liquidity and operational cash flows to meet debt obligation and committed capex plans over the medium term.”

In a similar statement on December 2, Care Ratings Ltd, another Indian rating agency, upgraded the rating of a port on India’s eastern coast, resting faith on Adani Ports which had acquired it. 

The CARE statement said that following the Hindenburg report, Adani Group reduced share pledges and decreased its debt but maintained a strong balance across its group companies. 

Bernstein Société Generale issued a long and detailed analysis on December 2. The analysts said that they had read the charges in the US but were not changing their ranking of three Adani Group companies that they track – Adani Ports, Ambuja Cements, and Adani Green Energy. 

In a report released on December 4, JP Morgan’s Asia Pacific research bureau declared that it did not see any stress “across key listed businesses of the group.”

Westwind

2024 hasn’t been a good year for India in the West. Canada accused India of assassinating a dissenter on Canadian soil and the US made similar accusations, putting New Delhi on the backfoot. The Adani charges will make things tougher for the Modi government. Incidentally,  the indictment came just said after Adani took to Twitter to congratulate Trump on his electoral win.

As India’s rising Mr. Big and coupled with his specialty in infrastructure, Gautam Adani is vital to India’s trade and soft power ambitions. Any stumbling blocks though, could be setbacks for India.