On August 30, the "Bloomberg Billionaires Index Rankings" showed that India's richest man, Gautam Adani, surpassed Bernard Arnault, chairman of The Lvmh Group (LVMH), the French luxury giant, to become the world's third richest man.
↑ Gautam Adani
According to reports, this is the first time in the history of Asia's richest people that it has ranked among the top three in the global rich list. Adani, 60, currently has a net worth of about $137.4 billion, second only to Tesla CEO Elon Musk and Amazon founder Jeff Bezos on the rich list.
Thanks to the soaring global commodity prices caused by the COVID-19 pandemic and the Russian-Ukrainian conflict, Adani, whose net worth of just $6.5 billion in 2020, now sits at $137.4 billion, up 21 times in two years, with $61 billion of growth achieved in the first eight months of this year.
Started with coal mines and ports
Be a "fellow countryman" with the Prime Minister of India
Born in 1962, Gotham Adani's father was a well-known local weaver in India. In 1988, Adani, who studied business at Gujarat University, dropped out of school to become a diamond sorter in Mumbai. Soon after, he switched to the diamond trade, earning the "first pot of gold" in his life in just one year.
Adani then returned to his native Gujarat and in 1988 founded Adani Exports Ltd, the predecessor of the Adani Group. In 2008, Adani became a billionaire.
↑ Adani and his family
In recent years, Adani has been committed to diversifying its business, expanding a business empire centered on ports and coal mining to airports, data centers, cement and green energy, with its market capitalization growing more than 10 times in the past three years.
Today, Adani Group accounts for more than a third of India's coal imports, and the surge in coal demand in the past few months has made it a lot of money. The group also owns Carmichael, Australia's largest coal mine, which is controversial, which has also helped it become the representative of the world's largest coal companies. However, the coal mine has faced a lot of criticism for its environmental impact on the Great Barrier Reef and the use of billions of liters of water each year.
Last year, Adani pledged to invest $70 billion in green energy, aiming to become the world's largest producer of renewable energy. Today, Adani Green Energy Co., Ltd. has also become the most gold-seeking "cash cow" in Adani's business empire. In addition, Adani Group owns India's largest private port and airport operator.
According to reports, there are currently 7 listed companies under the Adani Group, with a total market value of about $220 billion. Adani himself serves as chairman, with his wife, brother, two sons and several nephews holding different positions in the group. The Adani family owns up to 75% of the entire group.
↑ Adani and Modi are also from Gujarat and have had a "close relationship" for many years
Still, some critics argue that Mr. Adani benefited from his "close relationship" with Indian Prime Minister Narendra Modi. The two are also reportedly from Gujarat, and Adani was already a supporter of Modi, then Gujarat's chief minister, as early as 2003. When Modi ran in 2014, Adani lent him his private jet for use.
↑ In 2014, Modi used the Adani Group's private jet during the campaign
In 2018, while six Indian airports awaited privatization, Modi relaxed regulations to allow companies with no airport operating experience to bid. Adani Group bought all 6 airports in one go, becoming the largest airport operator in India.
The stock price of the energy company under the name soared
This year, the value has soared by $61 billion
Like global billionaires such as Musk and Bezos, Adani's wealth has soared during the COVID-19 pandemic and has grown exponentially. Its net personal wealth in 2020 was only $6.5 billion, and now it is $137.4 billion, or a 21-fold increase in two years. Of those, $61 billion was earned in the 8 months since the beginning of this year.
↑In 2020, Adani's personal net worth was $6.5 billion
One of the reasons for Adani's skyrocketing value is reportedly related to the rapid expansion of his business empire. Since the beginning of 2020, shares of Adani Enterprises and Adani Green Energy Ltd. have soared by more than 1300%. Adani Total Gas Ltd. rose about 1,900 percent, Adani Transmission Ltd. shares rose 900 percent, compared with a 42 percent increase in benchmark S&P's BSE Sensex over the same period.
As the market capitalization of several of Adani's companies has grown, his personal fortune has soared by $61 billion this year. In February, Adani overtook Indian tycoon Mukesh Ambani to become Asia's richest man. Benefiting from the sharp surge in global natural gas, coal use and prices, Adani's wealth has also grown alarmingly recently.
On July 21, Adani's worth was estimated at $112.5 billion. After 40 days, his value rose to $137.4 billion. Last month, he reportedly overtook Bill Gates to fourth place on the world's richest list. And after a sharp surge in wealth this week, he yesterday surpassed Bernard Arnault, chairman of French luxury giant LVMH, to become the world's third-richest man, behind Tesla CEO Elon Musk and Amazon founder Jeff Bezos with a net worth of $137.4 billion.
↑According to Bloomberg's list of the world's richest people, Adani has surpassed Bernard Arnold, chairman of The Lvmh Group (LVMH), the French luxury giant, to become the world's third-richest man
By comparison, Arnault's personal wealth has evaporated $42 billion this year to $136 billion. Not only Arnault, but all the richest people in the top ten of the "Bloomberg Billionaires Index" have seen their assets decline this year, with the exception of Adani.
Analysts: Group "over-leveraged"
Adani's "business empire" may be at risk of default
As his value soared, Adani also began to "raise his profile in other ways" in India. Last week, Adani announced a hostile takeover of New Delhi Television (NDTV), sparking an uproar.
↑On February 23, 2012, Adani Group Chairman Gortam Adani unveiled the company's new global corporate brand identity and logo at a press conference
ADANI Media Network, a subsidiary of the Adani Group, said in a statement that by acquiring a stake in a majority shareholder of New Delhi Television, the company has acquired a 29% stake in New Delhi Television, the amount of which has not been disclosed. Documents filed by Adani Group to the Mumbai Stock Exchange show that the company also initiated an offer to NDTV shareholders to acquire another 26 percent stake in the station for $61.77 million.
In response, NDTV's founders and promoters said in a statement that Adani acquired a 29 percent stake in the company without any "discussion, consent or notice."
However, even as Adani Group enters the media business, its rapid debt-driven expansion has raised concerns. On August 23, Fitch's credit research firm CreditSights issued a warning that Adani's business empire was over-indebted and at risk of default.
The report said that the pace of Adani Group's aggressive expansion in recent years has put pressure on its credit indicators and cash flow. The report said Adani Group continued to invest heavily in existing and new businesses through debt financing, many of which were "new and unrelated highly capital-intensive businesses", resulting in the group already in a "significantly over-leveraged" situation.
In the worst case scenario, Adani Group could fall into a debt trap and could default. The agency wrote, "We see little sign of the promoter (Adani) injecting equity capital into the group of companies, which we believe is necessary to reduce the leverage on the heavily indebted balance sheet." In addition, the group's fierce competition with former richest man Ambani's Reliance Industries to achieve market dominance could lead to "rash financial decisions."
Other reports have pointed out that "severe over-leverage" has also limited the attractiveness of Adani Group to investors. Many of India's and Wall Street's top investment institutions have opted to distance themselves from Adani's projects, in part because of "overvaluation." According to Refinitiv, the four largest Adani companies by market capitalization have historical price-to-earnings ratios between 260 and 725 times.
However, analysts at CreditSights said they were "pleased" by the Group's "close ties" with banks and the Modi government. The report said its founders had "close ties" with the Modi government and benefited from "policy winds.".
Red Star News reporter Xu Huan
Edited by Guan Li Guo Yu
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