How did Gautam Adani become so rich?
What does a country need to survive? Electricity, Transportation, Infrastructure, Finance. And, guess who has it all? Mr. Gautam Adani. He joined the $100 billion club of the world’s richest people and has added $23 billion to his wealth till April 2022. He has been constantly in news for surpassing wealth biggies like Mukesh Ambani, Warren Buffet, and Bill Gates, and now again, he has hit the headlines with his yet another deal to buy ACC and Ambuja Cements. Even though the market crashed and he fell from the $100 billion club, he is still 10 times richer than 2 years ago. So, what happened in the last two years that made Adani so rich? Let's find out.
From College drop-out to Businessman
In 1978, Gautam Adani dropped college in the 2nd year of BCom. to learn the dynamics of the diamond trade in Mumbai. But, soon, he had to move back to Gujarat to help his brother in the failing plastic business. To help his brother, he started importing PVC through Kandla Port. He also started supplying PVC to other small businesses even during the time of international price fluctuations. This earned him trust and more business. Soon, Gujarat Government granted him an import license from which he can import goods worth 12 crores without a Letter of Authorization. Adani further grabbed this opportunity and also started importing chemicals and petroleum products. At this point, he also caught the attention of politicians.
Contract of Mundra Port
In 1991, India was heading towards liberalization and this gave Adani a way to save crores of rupees every year. Till now, his company was mostly operating through Kandla Port which has huge traffic and often the clearing of shipments got delayed because of which Adani Enterprises had to face crores of loss every year. But, in 1995, as a measure of liberalization, Gujarat Government decided to privatize the Mundra Port and Adani got the contract. Further, in 2002, this port was connected to Indian Railways to facilitate transportation. It is now the largest private-sector port which is managed by Adani Ports & SEZ Ltd. This Company has acquired various ports and terminals since then and as of today, it holds around 24% of India’s total port capacity.
Next Venture….Power!
Continuing to be politically correct, we are talking about Adani Power. After becoming a multi-product port, Mundhra Port became a hub for many businesses, and in 1996, Adani Power was established. The Company has become the largest private-sector thermal power producer with an installed capacity of 12,450 MW. The Company has made Power Purchase agreements with various companies for supplying power for around 20 years. Adani also made its presence in renewable power generation through Adani Green Energy. This Company supplies electricity to various government entities and government-backed companies.
Rise of Adani
In 2020, the Adani Group expanded its solar manufacturing capacity and won the largest solar bid of $6 Billion. He also purchased a 74% stake in Mumbai International Airport and now has control over 7 airports. If we combine all his businesses, Adani controls Airports, Solar Power, Mines, Roads, Ports, Data Centres, and agri-supply chains. No doubt he is getting richer! Further, the Russia-Ukraine war created a vegetable oil crisis in the international market. India imports 60% of its edible oil and now because of shortage, it relies mainly on domestic players. This increased the share price of Adani Wilmar which has a significant share in the edible oil market in India.
Conclusion
So, his journey started as a college drop-out teenager to practically being a pillar in nation-building. In just 30 years, he created a mammoth wealth for himself as well as for the nation. Adani Group has also entered into defence manufacturing focusing on reducing India’s dependence on defence imports. Surely, there are much more zeros yet to be added to his wealth.