Mirror, mirror on the wall, who is the richest of them all?
Mirror: Why are you asking me again? You know the answer: It’s Mukesh Ambani, of course….no hang on a second. It’s Gautam Adani….Could it be? Has Gautam Adani run away with the crown as India’s richest man?
The answer says Forbes, the doyen of the wealth calculators, is that Adani has toppled Ambani from his throne. At $90.1 billion, Forbes says Adani is now the richest man in India and Asia. What’s more, he’s the world’s 10thrichest person. Ambani’s $100 million behind at $90 billion, says Forbes – though that could be described as small change for these multi-billionaires.
Calculating the stratospheric wealth of the world’s richest people is a tricky exercise. That’s underscored by the fact that the Bloomberg Wealth Index still keeps Ambani slightly out in front at $88.4 billion compared to Adani’s $88.1 billion. Bloomberg reckons India’s top two billionaires are in the global 11th and 12th spots. That puts them just behind Meta’s (the erstwhile Facebook) Mark Zuckerberg who’s now worth only $89.4 billion after his social media company crashed in the wake of poorer than expected results. Zuckerberg’s had a bad start to his year with his net worth plunging by $31 billion.
If we go by Forbes’ calculations, Ambani’s just a hundred million behind Adani and they could easily swap positions once again in the near future. And if we accept the Bloomberg numbers the fast-rising Adani is barely $300 million behind and could easily catch up very quickly.
Corporate earthquake
What’s the big deal if Adani, a self-made entrepreneur, overtakes Ambani? Well, Ambani’s been the leader of India’s rich list for the last 14 years. He was briefly toppled by pharmaceutical king Dilip Shangavi a few years ago but then moved back into first place. What’s more, he was so far ahead of all other challengers, it didn’t seem like anyone was likely to catch up. “If Adani has overtaken Ambani, it will be an earthquake for the Indian corporate world,” says one corporate observer.
There’s no question that Adani’s been moving meteorically up through the wealth charts all through 2021 and in the first few weeks of 2022. In April 2021, Forbes reckoned he was worth around $50 billion. His Adani group companies have nearly doubled in value in barely nine months. In slightly over a month since the start of January, Adani’s wealth has zoomed by $8.68 billion alone.
Ambani, by contrast, is down by around $2 billion from the beginning of the year. Ambani’s Reliance Industries slipped 1.47 per cent on Thursday and before that was down slightly for 2022. Ambani was worth $92.7 billion according to Forbes’ calculations in April 2021 and hasn’t moved much during the year. Ambani stock prices were also hit after the calling off of the Reliance deal with Saudi Arabia’s oil giant Aramco.
On overdrive, holdings multiplied
So what’s suddenly made Adani so rich, so fast? The reason is that he’s been in overdrive and his holdings have multiplied. He’s pushing into green energy, ports, airports, mines and power plants. But the big stock market winner that has helped propel Adani to the top slot is Adani Green Energy whose share price almost doubled in 2021. On Wednesday, Adani Green reported a 13.9 per cent rise in net profit to Rs 49 crore for the quarter ending December 31, 2021. Several other Adani group shares have also climbed steeply during 2021. Last year there were several occasions when Adani approached striking distance of Ambani in the wealth charts.
The Indian economy has had its ups and downs in the last seven years since the BJP came to power in 2014. But for the Adani Group. it’s been a period of tearaway growth. On April 30, 2014, just before that year’s general election, the Adani group was worth $5.9 billion. Mukesh Ambani was far out ahead on the same date at $22 billion.
Element of risk for investors
Some analysts say that the massive jump in the shares of companies controlled by Adani, who’s been a staunch supporter of Prime Minister Narendra Modi, and opacity around the group could spell risks for investors, especially if the BJP were to lose the 2024 elections. Also, market analysts keep a sharp eye on three Mauritius-based funds – Albula Investment Fund, Cresta Fund and APMS Investment Fund – which hold more than 90 per cent of their assets under management in various Adani group companies, according to Bloomberg Intelligence.
The two Gujarati businessmen who both owe their fortunes to carbon fuel sources are not direct competitors but could be facing off against each other in the not-too-distant future because of their gigantic ambitions in the fast-expanding green energy sector. One corporate observer says relations between the two men are not hostile but distinctly, “Cool. There is no warmth between them.”
Expansion plans
Both groups have unveiled enormous expansion plans in green energy. Investors were stunned in June when Ambani announced at a Reliance Industries AGM that the group had started work on “developing the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar. The new plants,” he said, “will manufacture and fully integrate all the critical components of the New Energy ecosystem”.
The price tag for Ambani’s green goals: Rs 60,000 crore or $8 billion over the next three years. But Adani isn’t that far behind: he’s looking to invest $30 billion in the coming decade in green energy.
Reliance, for starters, will make photovoltaic modules that are used to make solar panels. But being Ambani, he intends to make them on a giant scale and he aims to be one of the world’s cheapest producers. But such modules could be the least technologically challenging of the Ambani plans. Then, it will attack one of the biggest problems with renewable energy: how to store it. This is on the frontiers of renewable energy technology and only a few economically viable storage facilities exist globally. Ambani sounded remarkably confident about pulling it off, saying, “For the storage of intermittent energy – we will build an advanced energy storage battery factory.”
Fuel cell factory
Going one step further, he’s also going into the production of what’s called green hydrogen and will also build a fuel cell factory that will turn the green hydrogen into power. If he pulls all this off, Ambani will be a world leader. And people who doubt his abilities should look at how he turned Reliance Jio into a huge telecom winner. Says Ambani: “Reliance will put Gujarat and India on the world solar and hydrogen map.”
Meanwhile, Adani has already set a scorching pace in turning himself into a green energy giant and, after a series of corporate buyouts, is now the country’s solar energy king. He now produces 1500MW of solar energy. The Tatas, by comparison, produce about 300MW.
Airports, more airports
Adani has been moving in different directions too. In July he finally took over the operations of Mumbai International Airport from the GVK group which was tight on finances but reluctant to sell. The Adanis have also scooped up six airports owned by the Airports Authority of India. This means 25 per cent of the passengers going in and out of the country travel through an Adani airport.
The tycoon’s Adani Wilmar IPO lists on Tuesday and this should give the tycoon’s fortunes a further lift. The edible oil giant, India’s biggest oleo-chemical manufacturer that is a joint venture between the Adani group and Singapore-based Wilmar group, is seen as having strong tailwinds from higher household consumption.
Adani’s plans for the future are no less ambitious than Ambani. It already owns 12 ports and plans to be the world’s biggest ports operator by 2030. “We are among the five fastest-growing port companies in the world; we intend to retain this position…” Adani Ports CEO Karan Adani said in the company’s annual report.
So, it’s game on for the two billionaires as they jockey for top spot in the wealth indices.