Adani vs Ambani - All Your Questions Answered

When it comes to ideas, innovation and execution, Indians are way ahead of many competitors and contemporaries.

No wonder some of the worlds richest tycoons come from India.

And today we talk about 2 such businessmen who are not only richest in India but also among the richest in the world.

Gautam Adani and Mukesh Ambani.

Both men have built vast business empires, spanning across a wide range of industries.

In recent years, their rivalry has intensified, as they have competed for dominance in sectors such as energy, infrastructure, and telecom.

It makes it almost necessary that every Indian knows about these two gentlemen and the business houses that they run.

Gautam Adani

Born in a small village in Gujarat, India in 1962 to Shantilal and Shantaben Adani, Gautam Adani always had big dreams.

His father was a small textile merchant.

Having 7 siblings, life was not too good as the family had to go through poverty.

He dropped out of college in the 2nd year and started his business career with a small trading company in 1988. What followed was nothing short of a success story.

• 1988: Gautam Adani founds Adani Exports, a commodity trading company.
• 1991: Adani Exports secures a contract to manage the Mundra Port in Gujarat.
• 1995: Adani Exports begins construction of the Mundra Port.
• 1998: The Mundra Port becomes operational.
• 2000: Adani Exports forms a joint venture with Wilmar International to form Adani Wilmar, a food processing company.
• 2001: Adani Power is founded.
• 2006: Adani Transmission is founded.
• 2007: Adani Green Energy is founded.
• 2008: Adani Enterprises is listed on the Bombay Stock Exchange.
• 2010: Adani Mining is founded.
• 2015: Adani Ports and Special Economic Zones (APSEZ) becomes the largest private port operator in India.
• 2016: Adani Power becomes the largest private thermal power producer in India.
• 2017: Adani Green Energy becomes the largest renewable energy company in India.
• 2020: Commercial operations at Lucknow International Airport.
• 2021: Adani Enterprises grabs India’s largest expressway project, Rs 18.38 bn highway project from NHAI in Kerala.

Now let's turn our attention to...

Mukesh Ambani

Mukesh Ambani was born in India in 1957 to Dhirubhai Ambani and Kokilaben Ambani.

Just like Gautam Adani, Mukesh Ambani's father, Dhirubhai, was also a textile merchant.

He founded the Reliance group in 1966, the growth story of which was historical.

Mukesh Ambani studied chemical engineering at the Institute of Chemical Technology in Mumbai. After graduating, he joined Reliance Industries in 1981. He quickly rose through the ranks and became the managing director of the company in 1986.

After the death of his father in 2002, Mukesh took over the Reliance Group.

Today, the Reliance Group is one of the largest conglomerates in India, with interests in oil and gas, petrochemicals, retail, and telecommunications.

Here's how its milestones look like:

• 1958: Dhirubhai Ambani founds Reliance Commercial Corporation, a small trading firm.
• 1966: Reliance Commercial Corporation is incorporated as Reliance Textiles Industries.
• 1973: Reliance Textiles Industries diversifies into petrochemicals.
• 1977: Reliance Textiles Industries goes public and is renamed Reliance Industries.
• 1986: Mukesh Ambani becomes chairman and managing director of Reliance Industries.
• 1991: Reliance Industries builds a refinery in Jamnagar, Gujarat.
• 2002: Dhirubhai Ambani dies, and Mukesh Ambani becomes the sole chairman of Reliance Industries.
• 2004: Reliance Industries launches its telecoms business, Reliance Infocomm.
• 2016: Reliance Industries launches its digital services business, Jio.
• 2019: Reliance Industries becomes the first Indian company to cross Rs 10 trillion (tn) market capitalisation.
• 2020: Reliance Industries ranks as the 48th highest valued company in the world and ranks 96th on the Fortune Global 500 list.
• 2023: Reliance Industries sets a bold target of achieving 100 GW of renewable energy capacity by 2030.

It would be interesting to see how some of these top businesses are doing...

Let's start with the Adani Group.

The marketcaps mentioned below are all as on 13th Sept 2023.

# Adani Ports

It's the largest port operator in India. It handles over 250 million tonnes of cargo annually.

The company has been maintaining a healthy dividend payout of 20.8%. In the last 10 years, the company's median sales growth is 18.7%.

For the year ending March 2023, the company made sales of Rs 205.82 bn and booked a net profit of Rs 53.9 bn. The debt of the company stands at Rs 531.36 bn.

# Adani Power

It's the largest private power producer in India, with a capacity of over 20,000 megawatts with a marketcap of Rs 1,455 bn.

Adani power has delivered good profit growth of 48.1% CAGR over last 5 years, while maintaining a good return on equity (ROE) track record over the last 3 years at 33.8%.

Despite making repeated profits, Adani Power is not paying out any dividends.

For the year ending March 2023, Adani power made sales worth Rs 387.73 bn and clocked a net profit of Rs 107.2 bn.

The debt for the company stood at Rs 421.81 bn.

# Adani Green Energy

This is the largest solar power producer in India with a capacity of over 4,000 megawatts.

Adani Green Energy has a marketcap of Rs 1,576 bn. It has delivered good profit growth of 61.0% CAGR over last 5 years.

However, Adani Green Energy too has not been paying any dividends despite the repeated profits.

For the year ending March 2023, the company made sales of Rs 28.22 bn it and booked a net profit of Rs 9.73 bn. The debt for the company stood at Rs 542.23 bn.

# Adani Transmission

This is the largest private transmission company in India which operates over 15,000 kilometres of transmission lines.

Known in the markets as Adani Energy Solutions, it has a marketcap of Rs 953 bn.

Though the company is reporting repeated profits, it is not paying out dividends.

For the year ending March 2023, the company made sales of Rs 132.93 bn and posted a net profit of Rs 12.8 bn.

The company is poised for substantial capital expenditure over the decade, investing more than Rs 50 bn each year.

The debt for the company stood at Rs 342.70 bn.

# Adani Enterprises

This is the holding company for the Adani Group. It has interests in a variety of industries, including mining, integrated resources management (IRM), infrastructure such as airports, roads, rail/ metro, water, data centres, solar manufacturing, agro and defence.

With a marketcap of Rs 2,875 bn, the company made sales of Rs 1,369.78bn and posted a profit of Rs 24.22 bn in the year ending 2023.

The company has delivered good profit growth of 27.3% CAGR over last 5 years. The overall debt for the company stood at Rs 532 bn

Let's now look at the top businesses of the Ambani family.

# Reliance Industries

It's a Fortune 500 company and the largest private sector corporation in India.

Since it was formed, it has metamorphosed from a textiles and polyester company to an integrated player across energy, materials, retail, entertainment and digital services.

Reliance's products and services touch almost every Indian daily across economic and social spectrums.

Ambani's family have about 50% shareholding in the conglomerate. The company has a marketcap of Rs 16,589 bn and in the year ending March 2023 posted a net profit of Rs 740.88 bn.

The sales for the same year was Rs 8,764 bn while the debt stood at Rs 4,516.6 bn.

# Reliance Power

Reliance Power was established with an aim to construct, develop, operate and grow power projects not only in India, but also internationally.

By means of subsidiaries and also on its own, the company has a large portfolio of power generation capacity, both in operation as well as capacity under development.

With a marketcap of Rs 71 bn, the company posted a loss of over Rs 4.1 bn for the year ending March 2023. The sales in the same year was Rs 75.43 bn and the debt for the company stood at Rs 212.36 bn.

# Reliance Infrastructure

One of the largest infrastructure companies in India, Reliance Infrastructure is engaged in developing infrastructure projects through various Special Purpose Vehicles (SPVs) in several sectors.

Namely metro rail, power, airport, roads, in the infrastructure space, and the defence sector.

It is also a leader in the power businesses i.e. generation, transmission, distribution, and power trading.

For the year ending March 2023, the company had made sales of Rs 223.03 bn and posted a net loss of Rs 25.64 bn. The debt at the closing of March 2023 was Rs 115.1 bn

# Reliance Capital

Reliance Capital is a financial services company in India that is a constituent of the MSCI Global Small Cap Index.

It is a part of the Reliance Group and is one of the leading and most valuable financial services companies in the private sector in India.

Reliance Capital offers a wide range of financial services, including life, general, and health insurance; commercial and home finance; equities and commodities broking; wealth management services; distribution of financial products; asset reconstruction; proprietary investments; and other activities in financial services.

With a marketcap of Rs 3.03 bn, the company had sales of Rs 190.37 bn and booked losses worth Rs 17.59 bn in the year ending in March 2023.

Although the company has reduced debt, the debtor days have increased from 37.4 to 48.3 days. The over all debt stood at Rs 176.5 bn.

It has delivered poor sales growth of 0.33% in the last 5 years and has contingent liabilities Rs 38.35 bn.

Future of the Rivalry

By now with all the above insights and statistics, it is not wrong to conclude that there is a healthy rivalry between Adani and Reliance.

Or more so Mukesh Ambani and Gautam Adani.

Mukesh Ambani's net-worth is US$ 95.7 bn whereas Gautam Adani's is US$ 56.2 bn Both numbers as on 9th Sept 2023.

The rivalry between Adani and Ambani is likely to continue for many years to come. Both men are ambitious and driven, and they are not afraid to take risks.

In the coming years, we can expect to see them compete in industries such as technology, healthcare, and more.

They have already started diversifying big time in a lot of verticals for example media.

While Reliance is already heavily invested in media and entertainment with Network18, Jio Cinema, Forbes, Jio Studios, Adani group too has started investing in the same.

The recent NDTV and Adani deal is proof of the same. They even acquired 49% in Quintillion Business Media for Rs 480 m earlier this year.

Not to forget both companies are now largely interested in AI and its future as well.

Although it is extremely difficult to predict who will win in the race of rivalry, it will be nothing short of a fascinating battle to watch.

Conclusion

Mukesh Ambani and Gautam Adani are two men whose business empires have a profound impact on the Indian economy.

Although they both have taken different paths to success and despite their different backgrounds, Ambani and Adani have both benefited from India's economic liberalisation in the 1990s.

Not to forget the regular criticism they keep facing for their close ties to the government.

In recent years, Adani has become the world's richest man, while Ambani has slipped to second place. This is due in part to the rise of renewable energy, which is one of Adani's key focus areas.

It remains to be seen who will emerge as the leading Indian business tycoon in the years to come.

However, there is no doubt that both Ambani and Adani are two of the most influential figures in India's economy.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...