Gautam Adani becomes the second richest person in Asia - what are the risks?

In the last few days, a not so famous name reached the news and the list of the richest

people in Asia at an insane speed: Gautam Adani. He was born in India and is the Chairman of the Adani Group which is named after him. After some big achievements and sales increase of the sub-companies of the Adani Group, the whole company grows very fast. It seems like the perfect business empire, but in the background, some critics already had warned against the Adani Group and its power.

An experienced newcomer enters the world of business - Who is Gautam Adani?

Gautam Adani was born on the 24th of June 1962 in India. After discontinuing his study of

business at Gujarat University, he started working in the diamond industry. In 1988 he

founded the “Adani Exports Limited” which is now named “Adani Enterprises Limited”, the

main company that holds the Adani Group. Firstly he added the trading of raw materials and textiles to his business and later the Adani Group started to operate the port of Mundra.

Now, the Adani Group is a big player in international business activities but also plays a big role for India. The massive growth of the Adani Group makes Gautam Adani the fifth richest person in Asia with an asset of 50,5 billion dollars even above Jack Ma (founder of the Alibaba Group).

The Adani Group - building a business empire

The core of the Adani Group consists of six listed sub-companies that are specialised in a

specific service branch. There is the “Adani Enterprises” which is a company that is

specialised in mining and the trading of coal but also has some departments for

infrastructure, food processing and financial services. It is one of the most important

companies of this branch in India. Another listed Company is “Adani Ports and SEZ” (SEZ =

Special Economic Zone) that controls for example the port of Mudra and is the biggest

private port holder in India. These two companies are covering the areas of raw resources

and water trade ways.

Moreover, two companies of the Adani Group are operating in the energy branch. Firstly there is “Adani Power” which leads and owns power projects in India and secondly there is “Adani Green Energy” which owns wind- and solar plants with a power of 5,290 MW. Also, there is a company of the Adani Group called “Adani Total Gas”, that supplies cities with gas to transform it into energy. The last company of the Adani Group that is listed is called “Adani Transmission”. This company builds, owns and repairs energy supply systems to transport energy to the place where it is needed. This huge amount of different areas of business shows off the power and variety of the Adani group that is nearly active in every economic sector.

The key of success - why the Adani Group is so effective and which risk comes with it

So from the first impression, this system seems really good and efficient because many

important service sectors are covered, safe jobs are provided and the economy gets pushed. And at the moment this system functions very well, but if you look closer you can find some details that provide some risk we shouldn’t underestimate. The biggest advantage but also biggest risk at least for consumers of the Adani group is the system that the sub-companies are connected and in fact, it is only one company. That means that one company got a huge market share in many branches which gives the Adani Group and therefore Gautam Adani the force of nearly every sector of the Indian economy. That means that smaller companies could get kicked out of the market competition and a big part of the Indian economy depends on the decisions of one man who also influences the political situation in India.

It’s hard to decide whether the development of the Adani group is good or

not, because it’s not directly bad when economic sectors are connected and the market

competition doesn’t push corruption forwards, but there always will be the question: Is this too much power for one man?

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