MUMBAI (Reuters Breakingviews) – Gautam Adani is a different sort of Indian tycoon. The 60-year-old university dropout and son of a trader is a first-generation entrepreneur who has become the worlds fourth-richest man by building and buying critical energy and infrastructure assets at lightning speed. There is none of the obvious financial profligacy that broke many of his rivals in recent years, but other concerns cast a shadow over the billionaire who is starting to get too big to fail.
At some $220 billion, the combined market value of the Adani groups seven publicly traded companies, all of which carry the industrialists name, has increased tenfold in three years. Gautam Adani leads as chairman and is flanked by his wife, brother, two sons and some nephews in various roles. The familys power rests with large equity stakes of up to 75%, including in the flagship Adani Enterprises which houses data centres, roads and airports and incubates new projects.
Growth is both organic and fuelled by acquisitions. A $10.5 billion deal in May for Holcims India unit makes the group the countrys second-largest cement manufacturer. It operates seven airports, all but one picked up through government privatisations since 2019. These build on Adanis existing quasi-duopoly alongside the state in ports and power transmission. After a big purchase from SoftBank Group, Adani also owns the largest national portfolio of existing and under-construction renewable energy assets.
The tycoons animal spirits prowl an otherwise tame industrial wild. Eight of the 10 Indian business groups covered in Credit Suisses infamous House of Debt series published a decade ago ran into serious financial difficulties after Raghuram Rajan, then central bank governor, in 2015 initiated a review of banks asset quality. Some peers such as Essars Ruia brothers were stripped of prize assets. Only one from that notorious club, Gautam Adani, is still borrowing at a rapid clip. Even Indias other richest man, second-generation industrialist Mukesh Ambani, aimed for zero net debt at his Reliance Industries after watching rivals, including his brother Anil Ambani sink.
https://www.reuters.com/breakingviews/gautam-adani-takes-new-tycoon-risk-next-level-2022-08-09/
