The richest person in Asia Gautam Adani has successfully surpassed Jeff Bezos to become the third richest man in the world. While most of the fortunes were drowning, Adani’s fortune nearly doubled increasing $64.8 billion to $141.4 billion.
His fortune is the result of the jump in oil and natural gas prices, which has lifted the MSCI World/Energy Index to a 36% total return in 2022. Adani Total Gas Ltd. trade at 750 times profit, Adani Enterprises Ltd. and Adani Transmission Ltd. have valuations north of 400 times, Musk’s Tesla Inc. and Bezos’s Amazon.com Inc. have price-to-earnings ratios of about 100, while fellow Indian billionaire Mukesh Ambani’s Reliance Industries Ltd. trades at 28 times.
James Crabtree, author of “The Billionaire Raj,” said “Adani has built up an extraordinary fortune through a mix of aggressive risk-taking, rapid debt accumulation and canny political connections. His rapid rise over barely a decade to the summit of India and Asia’s tycoon class represents the possibilities and rampant inequality of India’s new Gilded Age”.
Even after being a drop out Adani tried his luck in Mumbai’s diamond Industry in 1980s and then invested in coal, data centres, media and cement. He had invested
$70 billion in green energy last and became the world’s largest renewable-energy producer.
Credit Sights analysts warned about the excessive debt levels of Adani’s firms and pointed out the increase in risk of entering new, unrelated businesses that are capital intensive. The Adani Group responded that it’s improved its debt metrics in the past decade, with the control ratios of its portfolio companies now “healthy” and in line with their respective industries and net debt has dropped to 3.2 times earnings before interest, taxes, depreciation and amortization from 7.6 times in 2013, the group.
Sharon Chen, a Bloomberg Intelligence analyst covering Adani’s ports and utilities units, said she’s not concerned by the level of leverage and doesn’t expect any funding issues. Hazari said “He’s not only on an acquisition spree and banks are willing to fund him, but he has close ties to the current administration. As long as this government lasts — and it is expected to last quite a long time — the music will continue.”