Gautam Adani. File
Indian industrialist Gautam Adani became the world’s third-richest person on the Bloomberg Billionaires Index on Tuesday, the first time an Asian has ranked in the top three.
The self-made billionaire has seen his net worth more than double to $137.4 billion in the last year, rising 20 spots on the index to now rank just behind Elon Musk and Jeff Bezos, Bloomberg News reported.
Adani, 60, made his fortune in ports and commodities trading and now operates India’s third-largest conglomerate with interests ranging from coal mining and edible oils to airports and news media.
His ballooning net worth reflects a stratospheric rise in the market capitalisation of his publicly listed companies, as investors back the Adani Group’s aggressive expansion of old and new businesses.
Shares in the flagship Adani Enterprises — of which the billionaire owns 75 per cent — have soared more than 2,400 per cent since March 2020, and doubled in value in the past six months.
Stock price surges in other group companies including Adani Transmission, Adani Power, Adani Ports and Adani Green Energy have catapulted Adani past fellow Indian billionaire Mukesh Ambani.
Born in the city of Ahmedabad in the western state of Gujarat to a middle-class family, Adani dropped out of college to work briefly in the diamond industry before starting his export business in 1988.
In 1995, he won a contract to build and operate a commercial shipping port at Mundra in Gujarat, which has since grown to become India’s largest port.
At the same time, Adani expanded into thermal power generation and coal mining in India and overseas.
In recent years, the conglomerate has forayed into petrochemicals, cement, data centres and copper refining, in addition to establishing a renewable energy business with ambitious targets.
Recent investments in Indian news media and a bid for 5G airwaves this year have raised speculation that the billionaire’s empire could soon impinge on sectors dominated by Ambani’s Reliance Industries.
But Adani’s rapid expansion into capital-intensive businesses has raised alarm, with Fitch Group’s CreditSights warning last week that the group is “deeply overleveraged”.
“In the worst-case scenario, overly ambitious debt-funded growth plans could eventually spiral into a massive debt trap, and possibly culminate into a distressed situation or default,” the credit market research firm said in a note.
The media arm of the Adani group recently it had exercised rights to acquire an indirect stake of 29.18 per cent in New Delhi Television (NDTV) through the conversion of loans into an equity stake in the promoter group company of NDTV.
The move has also triggered an open offer for acquiring a 26 per cent stake in NDTV from its shareholders, even as the broadcaster said its founder-promoters had not consented to the exercise of rights, nor was any conversation or input given on the matter. The promoter entity RRPR Holding, at the centre of the acquisition, has been asked to transfer its shares to the acquirer Vishvapradhan Commercial (VCPL) in two days, NDTV said.
“The NDTV founders and the company would like to make it clear that this exercise of rights by VCPL was executed without any input from, conversation with, or consent of the NDTV founders, who, like NDTV, have been made aware of this exercise of rights only today. As recently as yesterday, NDTV had informed the exchanges that there was no change in the shareholding of its founders,” NDTV said.
A mail sent to Suparna Singh, group president of NDTV, as well as a text message sent to Prannoy Roy on the company’s next course of action elicited no response till the time of going to press.
The open offer for 26 per stake in NDTV, according to the document released to the stock exchanges on Tuesday evening, has been valued at Rs 493 crore. The open offer price has been pegged at Rs 294 per share, a discount of 19.7 per cent to Tuesday’s closing price of Rs 366.2 apiece. As on June 30, NDTV’s Prannoy Roy and Radhika Roy directly held 15.94 per cent and 16.32 per cent, respectively, in the company. RRPR Holding owned 29.18 per cent.
AMG Media Networks Limited’s wholly owned subsidiary VCPL holds warrants of RRPR Holding, entitling it to convert them into 99.99 per cent stake in the firm. “VCPL has exercised warrants to acquire 99.5 per cent stake in RRPR. Such acquisition will result in VCPL acquiring control of RRPR,” the Adani group said in a statement. AMG Media Networks is owned by Adani Enterprises.