Vinayak Chatterjee: Bucket number one seeks to answer your question on the size and scale of Adani’s involvement and investment in Indian infrastructure projects.

Broadly, they are grouped in five investment groups. The first is energy and utility. The second is transport and logistics. The third is intermediate manufacturing. Fourth is natural resources and the fifth is not infra but it is FMCG, with one of their companies in the food business. So, here are the five buckets or the five groupings.

Let’s look at energy and utility, which is group number one for the infra. Adani Group is one of the largest players in electricity generation, transmission and distribution across the full value chain. It is present in both conventional as well as renewable sectors, and it also has a vibrant investment programme for the manufacture of solar, wind and green hydrogen components. So, it has a significant presence in the energy and utility space.

The second group is transport and logistics. It is common knowledge that in the private sector, Adani Group is the largest owner operator of ports and airports. Increasingly, it is building a sizable portfolio in roads also, both as an investor and as an EPC contractor, and very few are aware of the fact that it is a significant player in warehousing. About 30% of India’s grain storage is stored in Adani warehouses, whether in Punjab or at the ports. So, in transport and logistics, ports, airports, roads and warehouses, that’s a very interesting and dominant cluster.

The third group is intermediate manufacturing. It is the second largest player in the cement business, with the acquisition of ACC Ltd. and Ambuja Cements Ltd. It also has projects in the intermediate space, which is green PVC, etc. So, after cement, it also has projects in the intermediate space.

Then, it has a group called natural resources. It is well-known that Gautam Adani’s entrepreneurial journey started in many sectors and in many senses in and, in fact, in coal mining and coal trading. Now, they have coal mines in Australia and Indonesia; there is a vibrant coal trading business. So, that’s the natural resources, and with cement, you will have to be industrial resources with stuff like mining limestone, limestone quarries and all that. 

All four form part of what would be called the natural resources mining space. Finally, in the non-infra space, there is a very interesting player in India’s FMCG market, which is the operation of this firm called Adani Wilmar Ltd., which manufactures and supplies this fairly famous brand of ‘Fortune’ oils. But it has gone far beyond oils to supply a lot of food staples into Indian households. …Its turnover has overtaken that of Unilever India, which says quite a lot.

Therefore, having laid out this play of infrastructure, investments and projects, what is the common link? The common link is very simple. In practically every segment, it is the market leader.

It’s interesting, it’s not easy for a group to be a market leader in this wide span: in energy utility, transport logistics, intermediate, natural resources and FMCG, it is a market leader. In all, these businesses address very fast-growing domestic demand. If India is the fastest growing economy in the world, that gives energy to Fortune oil; it has an insatiable appetite to consume such outputs. It faces fast growing domestic demand. It has all these entities.

…I will see newspaper reports saying that the entire group is family dominated, but interestingly, all these businesses are headed by fairly reputed professional managers. It has all these businesses that have strong cash flows.

In the Infra side of it, they have long concession periods, fully operating assets and good operating results in cash through. In fact, the banks, NBFCs and others have all commented from SBI to LIC to others that they really didn’t have any concern on their lending to their operating projects.

After this discourse on bucket one, which seeks to answer the question on the breadth and depth of its operations and what is the common thread linking all of that.  So, the bottom line is very clear, the operating businesses are domestic demand facing, protected from the vagaries of international trade, have very strong professional managements running them on a day-to-day basis, and has strong operating reserves and cash flows, and the banks and others have publicly stated that there doesn’t seem to be any concern on these operating companies.