A rupee invested in Adani Enterprises two-and-a-half decades back has given over 800-times return, billionaire Gautam Adani said as he saw his infrastructure conglomerate evolve into an integrated ‘platform of platforms’
Speaking at the JP Morgan India Summit - Future in Focus, the Adani Group chairman said the seaports-to-airports-to-energy group’s incubation model has created six publicly-traded companies with thousands of jobs and unprecedented shareholder value.
“A one-rupee investment in Adani Enterprises (at the time of) our first IPO in 1994 has returned over 800x,” he said.
A college dropout, Mr. Adani (58) started with trading in commodities and went on to build a conglomerate that is the country’s biggest sea-port operator and is poised to be India’s largest private airport developer. It has interests spanning energy, mining, gas, renewables, defence and agro-commodities.
“We basically build infrastructure that enables ‘flow’ - the flow of goods and materials, the flow of electrons, the flow of people, and the flow of data. This focus on helping build India’s infrastructure forms the core of our philosophy,” he said.
The vision to build India, he said, enabled Adani Group to enter sectors facing critical demand gaps and growth through expansion into adjacent sectors.
Its incubation model of nurturing new businesses within the flagship company, Adani Enterprises Ltd (AEL) led to the creation of six publicly-traded companies that created thousands of jobs and delivered unprecedented value to its shareholders, he said.
From emerging as a market leader across its various businesses of thermal power, renewables, ports and logistics and gas distribution to foraying into new sectors aligned to new India’s needs such as airports, aerospace and defence and data centres, Adani said that his group has built India’s largest infrastructure business.
The infrastructure business “is now manifesting itself as an integrated ‘platform of platforms’,” he said. “This platform helps us bridge the B2B to B2C gap in unique ways and provide to India its largest physical ‘infrastructure as a service’ platform.”
He said the Adani Group’s journey over the past two decades has been one of continuous transition - from one business to linked businesses while maintaining a 10-year CAGR growth of 35%.
Adani debunks GDP rhetoric
Mr. Adani debunked the narrow fixation on GDP numbers, saying fundamentals are intact and India will be the second-largest economy by 2050 and has an edge over global peers in terms of business opportunities.
“I will state without any hesitation — that — in my view - over the next three decades, India is the world’s greatest business opportunity,” he said.
India’s geostrategic position and massive market size give it an edge over its global peers amid the fundamental political realignment of nations taking shape, he said adding opportunities for India are likely to accelerate on the other side of the pandemic.
“For the sake of the fans of the GDP metric, let’s look at some statistics. The global GDP in 1990 was USD 38 trillion. Today, 30 years later, this number is USD 90 trillion. Projecting for another 30 years, in 2050 the global GDP is expected to be about USD 170 trillion with India becoming the second-largest economy in the world,” he said.
Mr. Adani termed the Indian economy shrinking by a record 23.9% in the April-June quarter as a short-term setback.
“The current focus on standardised GDP predictions as against truly understanding what a nation could look like over a decade has unfortunately become one of the primary elements for measuring the health of an economy. In my view, patience and long-term planning and most importantly, an alignment with the government’s business agenda are what creates the greatest value,” he said.
“As an entrepreneur, I am an optimist, and therefore the lenses through which I see opportunities may be different than some of yours. I recognise that the view that you cannot build a long-term future on short-term thinking, may not be in alignment with the objectives of certain priorities of the investment community,” he said.
He told the forum to stop viewing all nations through old Western growth metrics.
“Democracy cannot take a cookie-cutter approach and we should accept that different nations will have their own flavour of democracy and capitalism.”
Stating that the AatmaNirbhar Bharat or self-reliant India programme will be a game-changer, he said India building a crumbling supply chain infrastructure that stood exposed to COVID-19, as also a strong head start in digital transformation will help re-build the economy.
