The Adani Group has been in the spotlight recently. Since the publication of the Hindenburg report, the stock prices of the companies that make up the Adani Group, have experienced serious volatility. The whole market has felt the ripples and multiple industries have been affected.
In this article, we will explore the history of the Adani Group and its companies and try to put together the pieces of its meteoric growth.
Let's start with an overview of the Adani Group's history:
Adani Group: A Story Of Unprecedented Growth
Adani Exports, a flagship company of Adani Enterprises (then Adani Exports Limited), was established in 1988 with a modest capital of ₹5 lakh. It was a commodity trading company specialising in agricultural and textile products.
By 1990, the Adani Group, led by Gautam Adani, had expanded into the import and export of raw materials. They had also started work on building the first private port in our country.
The companies of the Adani Group quickly became major players in every industry in which they operated. In 1994, Adani Enterprises was listed on the Indian Stock Exchange, and on 26 May 26 1998, the Mundra Port became operational. From here, the group expanded into multiple sectors in the following years.
In 1999, Adani Exports signed a joint memorandum with Wilmar Trading. By the early 2000s, the Adani Group was already dominating the import-export sector. In 2001, the Adani Group forayed into the gas distribution business. In 2009, Adani Power Limited went public.
The Adani Group has since expanded internationally, investing in mining, power and port construction projects in Africa, Australia and Indonesia. The group acquired the Bunyu mine in Indonesia in 2018 and the Carmichael mine in Australia in 2010.
In the 2010s, the Adani Group has won a number of historic projects. One major example is the construction of India's biggest solar power plant in Gujarat in 2012. Another is the responsibility for commercial operations at the Lucknow airport.
By 2018, Fortune, a brand launched by the Adani Group, had become the largest food FMCG brand in the country. In 2018, the group established the country's first private UAV manufacturing unit. By 2020, Adani Group was managing six airports across the country. More recently, in 2021, Adani Group was awarded India’s largest ever expressway project. In 2022, Adani Group completed the acquisition of Mumbai and Navi Mumbai airports. In the same year, Adani Wilmar Limited’s IPO was launched and 17 times subscribed.
Here's a brief overview of all the listed companies controlled by the Adani Group:
Adani Enterprises
Within the Adani Group, Adani Enterprises acts as an incubator for the group's new companies. It is also engaged in major mining and commodity training operations. It has a diversified portfolio of services and products, which it controls through a number of subsidiaries.
Adani Power
As the name suggests, Adani Power is involved in the development, operation and maintenance of power plant projects. Adani Power is one of the largest private-sector power generation companies in India.
Adani Green Energy
Adani Green Energy is the world's largest producer of clean energy (by capacity). The company is responsible for managing over 12 gigawatts of energy production. It does this through its three subsidiaries- Adani Renewable Energy Thirty-Six Limited, Adani Renewable Energy Forty Limited, and Adani Renewable Energy Forty-Seven Limited.
Adani Ports & SEZ
Adani Ports and SEZ is engaged in port management, logistics and special economic zones. The company currently operates five ports in different states of the country.
Adani Transmission
Adani Transmission is engaged in the commissioning and operation of power transmission systems. The company is responsible for over 17,000 kilometres of power transmission lines.
Adani Total Gas
Adani Total Gas is a joint venture between the Adani Group and the French oil and gas company TotalEnergies SE. It is an urban gas distribution company, the biggest one in India.
Adani Wilmar
Adani Wilmar is another joint venture. The partnership between the Adani Group and Wilmar International is behind some successful brands, including Fortune edible oils.
Controversies Surrounding The Adani Group Of Companies
The Adani Group of companies has been involved in a number of controversies since its inception in 1988. The group has faced accusations that the Mundra port was built without environmental clearance. Some allegations also describe how the promoters of the Adani Group may have influenced certain actions of the state-owned Kandla port authorities.
Some research companies, and even the recent Hindenburg report, accuse the group of floating new companies and pledging their shares to finance expansions and shore up struggling companies across the group.
Another major accusation in the recent Hindenburg report is that some investment funds have over 90% of their investments in Adani Group companies. There is speculation that these funds have been used to drive up the share prices of Adani Group companies, allowing the group to pledge its shares at a high valuation and easily obtain loans.
Since the short-selling company released its report, the shares of all listed companies under the Adani Group have seen a serious downfall.
Disclaimer
The investment options and stocks mentioned here are not recommendations. Please go through your own due diligence and conduct thorough research before investing. Investment in the securities market is subject to market risks. Please read the Risk Disclosure documents carefully before investing. Past performance of instruments/securities does not indicate their future performance. Due to the price fluctuation risk and the market risk, there is no guarantee that your personal investment objectives will be achieved.