Adani Group now India's most valued conglomerate; beats Tata Group
What's the story
Gautam Adani-led Adani Group has surpassed Tata Group to become India's most valuable conglomerate with an overall market capitalization of over Rs. 22 lakh crore on the Bombay Stock Exchange. Trailing it are Tata Group, valued at Rs. 20 lakh crore, and Reliance Group at Rs. 17 lakh crore. Moreover, Adani Group acquired Ambuja Cements and ACC, becoming India's second-largest cement producer on Friday.
Context
Why does this story matter?
Notably, Adani briefly became the world's second-richest person, behind Tesla's Elon Musk, on Friday, overtaking Amazon's Jeff Bezos, before returning to the third spot on Forbes's Real-Time Billionaires List following a decline in stocks. Last month, Gautam Adani became the world's third-richest person and the first Asian to break into the top three on the Bloomberg Billionaires Index, beating Mukesh Ambani and Jack Ma.
Information
Adani bought Ambuja Cement, ACC for $6.4 bn
Before the market closed on Friday, the nine listed firms of Adani Group, including the recently-acquired Ambuja Cements and ACC Ltd., lost a total of Rs. 40,000 crore while the 27 listed firms of Tata Group lost nearly Rs. 60,000 crore as stocks fell. Adani Group bought the two cement-producing firms for $6.4 billion, as per Switzerland-based Holcim Group, which held the firms.
Details
Adani Group's stock prices have soared sharply this year
Excluding Ambuja Cements and ACC Ltd., the market capitalization of Adani Group has grown by over Rs. 10 lakh crore this year following a sharp spike in stock prices of its companies. During the same period, Tata Group lost nearly Rs. 2.57 lakh crore as its flagship company Tata Consultancy Services—which accounts for 53% of the group's market capitalization—witnessed a decline of over 17%.
Facts
Wealth well managed among firms
Adani Group's wealth is well divided among its firms. Adani Transmission is its most valued firm (Rs. 4.57 lakh crore), which accounts for one-fifth of the group's total market cap. The group's stocks have witnessed a run-up this year as share prices of four firms reportedly more than doubled. Adani Power grew 3.9 times while Adani Transmission increased by 2.4 times.
Businesses
Focused on diversification since last few years
A first-generation entrepreneur, Adani has lately focused on expanding his group's ports-to-power transmission empire and has ventured into a variety of businesses with which it has no experience, say analysts. The group saw growth in data centers, cement, and media, and recently acquired a 29.18% stake in NDTV. Additionally, his group owns the largest private-sector port and airport operator, coal miner, and city-gas distributor.
Debt
Adani Group's debt stands at Rs. 2.6 lakh crore
While Adani's fortune has soared, market experts have highlighted the conglomerate is "over-leveraged" with a dismal debt-to-equity ratio. The acquisition of the cement firms added another Rs. 40,000 crore debt to the group's account, taking it nearly to Rs. 2.6 lakh crore—which was at Rs. 1 lakh crore five years ago—according to an analysis by Credit Suisse.