And how it is dangerous for India.
Adani is invested in these sectors.
- Electricity
- Ports
- Airports
- Railway
- Coal
- Wind Power
- Data Centers
- Agriculture (for which Modi tried to bring in the three farm laws!)
- Real Estate
- Cement
- Fast Moving Consumer Goods
- Emerging Sector Hydrogen
- Gas
- Defense
What is the common thing that you see in all of the above?
These are all
1. Essential for almost everyone.
2. There is a ready market for these products and services.
3. These are all policy driven and policy affected.
4. There are ready customers for each of his service.
5. He does not have to spend on advertising and marketing.
6. All businesses have recurring income, invest once, reap every day.
Does your business have the same parameters?
Or are you investing every day to earn for the day?
Of course, there are operational expenses for what Adani does but all of that is taken care of by recurring income.
Like for example, everybody is consuming electricity. He not only sells electricity, he sells coal to thermal power plants across India and has his own power generation facilities.
Ports are essential for the nation and import/export takes place through these ports. Set up though public investment, they are being handed over to him one by one.
Same is true for airports. Flights are going to be taking off and landing every hour, in busy airports they are taking off every three to five minutes. On a slack day, a minder at Terminal One in Mumbai told us that today they were expecting 75,000 to 85,000 passengers. The staff is given daily briefings and they know in advance as to how many flights are coming in and taking off and accordingly run the services, including trolley services, food services, etc. On peak days, the traffic hits 1,50,000+ passengers, multiply that with airport fees that every passenger pays and you will know how much money he is getting every day from passengers alone.
He needs to move coal, so he has invested in railways by having his own wagons that move coal from east coast to rest of India.
Government of India mandated that coal that reaches the east coast will be transported by ships to west coast, Adani’s port, and then transported to thermal plants. Thus instead of coal going straight from east coast to Punjab, it first goes to Gujarat and then it goes to Punjab adding thousands of extra kilometers and cost to the coal.
He is setting up wind power plants in India and in countries like Sri Lanka (often Modi getting him the contracts).
Where ever Adani has an interest, Modi goes and gets him the contracts.
Now he is entering the data center space. Here an investment of 4 Billion USD is being planned, around 35,000 Crores. I am sure government will now come out with new subsidies for this business, may give him land for free. He already has his own power, government may waive off import duties for equipment or he may do over invoicing of equipment and siphon off money like he did earlier.
Same is the case with real estate. The Dharavi Redevelopment project is a stark example of this. He has become a quasi-government in the area. He won the contract for less than 5000 Crores after an already awarded tender for 35,000 Crore was cancelled to allow him to come in.
The only business where he requires consumer attention is his food business, that of Adani Wilmar and Fortune brand of FMCG. That is the only place where he is dependent on the whims and fancies of the customer and faces competition.
Same has been the Cement Story. He has nudged out almost all cement companies and now owns a major chunk of cement production. Once again, this is a commodity that every builder needs to consume and in our growing market, is an essential.
He is into defense products, manufacturing drones (actually assembling them). Here too, his customers are from the defense forces of India, whose orders are decided by Government of India.
He is selling Gas, once again using his ports to import gas and then sell it to consumers or use it in gas fired power plants producing electricity that he sells across the country.
This reads like the board of popular game, Monopoly.
He owns 5G Spectrum too, taken for the use of his own company, allowed through policy change by Government of India. I think he will enter Telecom too, may acquire struggling Vodafone Idea, a move only prevented by the presence of Jio owned by Mukesh Ambani, another Modi supporter, who can not be toyed with.
The stamp of Modi on Adani is clearly visible and in-our-face.
It could be the proverbial case of putting all eggs in one basket!
When Adani falls, and it will fall because it is an empire constructed on support by Modi, the nation may end up getting hurt.
