Gautam Adani flanks Modi as group announces big investment plans
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Indian Prime Minister Narendra Modi (second from left) and billionaire Gautam Adani (second from right) at the Rising Rajasthan Global Investment Summit in Jaipur on Dec 9.
PHOTO: GOVERNMENT OF RAJASTHAN
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MUMBAI – At a public event where billionaire Gautam Adani sat close to Indian Prime Minister Narendra Modi, the Adani Group announced a plan to invest tens of billions of dollars, signalling that both its business ambitions and political goodwill were intact despite the company’s legal woes in the US.
About 50 per cent of the 7.5 trillion rupees (S$118.5 billion) investment in the western Indian state of Rajasthan would be done over the next five years, Mr Karan Adani, managing director of Adani Ports and Special Economic Zone, said on Dec 9 as his father Gautam sat in the front row, a few seats away from Mr Modi.
No details were shared on how this outlay will be financed. An Adani Group representative did not respond to an e-mail query seeking clarity on this.
While such investment promises are more a statement of intent – and not a hard obligation – it seeks to show the group is continuing business as usual. And Mr Modi’s public appearance alongside Mr Adani shows he has not lost his political capital with the Indian government.
The show of confidence comes less than a month of Mr Adani, Asia’s second-richest man
“We plan to build here the world’s biggest integrated green energy ecosystem,” Mr Karan Adani said, with 100 gigawatts of renewable energy, two million tonnes of hydrogen and 1.8 gigawatts of pumped-storage hydroelectricity.
“Beyond energy, Rajasthan is critical to our ambition to become India’s largest cement company,” he added.
The group plans to set up four cement plants to add six million tonnes of annual capacity, he added. Building a facility at Jaipur airport, Rajasthan’s capital city, and a logistics park are some of the other projects in planning.
Other Indian billionaires also made investment commitments to Rajasthan at the Dec 9 event.
While Mr Gautam Adani did not speak at the event, it was his second public appearance since the US Justice Department’s bombshell dropped, accusing him, his nephew Sagar Adani and a group executive of securities and wire fraud.
Shock indictment
The shock indictment shaved US$34 billion off Adani firms’ market value in less than a week, forced one of the companies to scrap a US$600 million green bond sale, put seven Adani firms on ratings watch and prompted partners like TotalEnergies to suspend fresh investments.
The group has since last week been looking to reclaim the lost ground. On Dec 1, Mr Gautam Adani, in his first public comments since the US action, said this was not the first time his empire had faced such challenges and that “every attack makes us stronger”.
The group published a credit report on Nov 25 to reassure investors and creditors of its businesses’ robust financial health.
It had a total debt of 2.58 trillion rupees as at end-September compared with cash and cash equivalents of 530.2 billion rupees, according to the report, as well as an asset base of US$66 billion.
The group will depend on President-elect Donald Trump’s administration to vigorously pursue this probe – or not. Also, any extradition request for Mr Adani will need cooperation from the Modi government.
Mr Adani, who comes from the same western Indian state of Gujarat as Mr Modi, has often dovetailed his group’s strategy to Mr Modi’s policy priorities. BLOOMBERG
