The spectacular rise and rise of Adani Group

Former editor of the formidable Economic & Political Weekly, Paranjoy Guhathakurta, has been busy collecting material on the Adani Group. Bhasha Singh spoke to him about the group which has interests across segments and sectors which have an affect on the country’s economy.

What triggered your interest in the Adani Group? What did you find interesting and when?

As a student of the nexus between politics and business in this country and while trying to understand the way crony capitalism works, I have for some years now been intrigued about this person called Gautam Adani, who almost nobody knew 20 years ago. Today, he is not just one of India’s richest men but the corporate conglomerate that he heads controls crucial segments of the country’s economy. What is truly amazing is the control he exercises over these sectors in this short period of time.

Let me give you a few examples. The Adani Group is one of the biggest – if not the biggest – generator of electricity in the private sector, by using coal as well as solar power. The Adani Group is one of the country’s biggest transmitters of electricity in the private sector. It is the biggest importer of coal and it is the biggest coal mining operator in the country. The Group directly or indirectly controls the activities of 12 ports on both the West coast and the East coast. It is Adani’s “string of jewels,” if you like, and the 13th port may also be added to the list soon.

That’s not all. The Adani Group, its partners and associates are among the biggest aggregators of cut and polished diamonds and gold jewellery in the country. The Group is also the biggest importer of edible oils in India; one of the biggest importers of apples to India besides having substantial interests in real estate, not to mention its recent forays in the production of defence equipment, notably drones (or Unmanned Aerial Vehicles) in collaboration with an Israeli company.

Where the Group might have bitten off more than it can chew is in Australia. So far it has so failed to set up what could become the world’s largest greenfield coal mining project in Queensland, Australia. There the Group is facing a lot of opposition from civil society organisations and there are funding issues as well. So, it is not yet clear if and when the group will be able to establish this project.

Is this the first foreign foray of the Adani Group?

The Group has business interests all over the world but none as big as the coal mining project that is proposed to be built in Queensland. It’s not just meant to become the biggest greenfield coal mining project of its kind anywhere in the world, it involves development of a railroad and a port. It would open up the area to new coal mines. If this project is successful, and I am not at all sure it will, it would be among the dozen largest coal mining projects globally.

Are you suggesting that this phenomenal rise and expansion of the Adani Group is due to investments made by unnamed politicians?

No. I have no evidence to indicate that.

But surely the expansion of the Group could well be due to his business acumen and enterprising spirit, for his management skills and his ability to raise capital…

I have no hesitation in saying that Gautam Adani may have displayed considerable business acumen; and he may have amazing entrepreneurial talent. After all, for a college dropout who started his business by trading in plastics, he has indeed come a long way. But I firmly believe that whether it’s the establishment of the Mundra port or various other projects, the conglomerate headed by Adani wouldn’t be where it is if it hadn’t been for a favourable policy regime at the level of the state government as well as the Central government. One such example is the shipping policy of the country which has been recently tweaked.

It’s hardly a secret that Adani has not just been a big supporter of Prime Minister Narendra Modi in the run-up to the 2014 general elections, Modi had traversed the length and breadth of the country using the private aircraft owned by the Adani Group. I am not suggesting that anything illegal has been done. I am merely stating facts.

It’s also a fact that after the 2002 anti-Muslim riots in Gujarat, post Godhra, there was one section of Indian industry, including important corporate captains who were part of the CII (Confederation of Indian Industry) at that point of time, which was unhappy at what had happened in Gujarat. Among the people who took the lead in setting up a parallel industry body in supporting Narendra Modi was none other than Gautam Adani.

He also took the lead in promoting the Gujarat government’s “Vibrant Gujarat” summits. So, Adani’s proximity to the Prime Minister is hardly new.

But the Group, as you say, grew over a period of 20 years. If you compare the Adani Group before 2014 and after that, what do you find?

Even under the UPA regime, the Adani Group grew. But the growth of the Adani Group in the recent past, say over the last seven to ten years has been particularly spectacular. All the indices indicate that the growth of the Group has been especially impressive in the years after Modi became the Chief Minister of Gujarat. It may be a coincidence but Adani’s business activities have expanded fairly dramatically in the recent past and certainly after Modi became Prime Minister of India.

To repeat the point that you made, I am not for a moment doubting his business acumen but what I am also suggesting is that the incredible rise and rise of Gautam Adani has a lot to do with a favourable policy regime. This happened during the Congress regime as well because it was during the tenure of Congress governments (in Gujarat) or Congress-led governments (in New Delhi) that he obtained largest tracts of land to set up Mundra port, which is India’s largest port in a Special Economic Zone. At the rate it is expanding, it will soon become India’s biggest port, overtaking the government-owned Jawahar Lal Nehru Port Trust.

It is also a fact that the rise of Adani preceded Modi becoming the Chief Minister of Gujarat in 2001. The establishment of the Mundra port complex, that is now India’s biggest private port, started when the Congress was in power in Gujarat.

So, he would have been favoured by the Congress government too?

Absolutely. What I am suggesting is that the growth of the Group he heads began during the Congress regime and subsequently accelerated during the present regime. That’s all I am saying and the facts bear me out.

A more charitable view could be that Narendra Modi is more business friendly or the NDA government is more favourable to business…

You could certainly attribute Gautam Adani and his Group’s spectacular rise to a favourable policy regime initiated by Narendra Modi when he was Chief Minister of Gujarat and subsequently as the Prime Minister of India.