Adani Enterprises Ltd. (AEL), the flagship of the Adani Group created by Gautam Adani, began as a modest commodity trading operation and went on to incubate a dozen firms and expand through acquisitions.
Before the Hindenburg Research report caused a drop in the share prices of Group companies, the blistering run of Adani firms, lead by AEL, on the stock exchanges propelled the Group to the top spot in market capitalization and made Gautam Adani the third richest man in the world.
Stock of AEL
US-based Hindenburg Research published a report on the Adani group on January 25 accusing the firm of “brazen stock manipulation and accounting fraud” as the Adani Enterprises follow-on-public offering (FPO) to fund Rs 20,000 crore opened for subscription for anchor investors.
The shares of all nine listed group firms fell as the Adani group referred to the article as “maliciously nasty” and even said that it intended to sue Hindenburg. They have lost a total of Rs 9.1 lakh crore in market capitalization during the past seven trading sessions, or 47.4% of their market value. Market capitalization for the group decreased from Rs 19.18 trillion on January 24 to Rs 10.07 trillion on 3rd February
On Wednesday and Thursday, there was intense selling pressure on the company’s flagship, Adani Enterprises. Its stock has decreased by 54% in the past seven trading sessions.
Gautam Adani, who fell from third place to seventeenth place on the index of the world’s billionaires on February 3, with a net worth of $61.7 billion, has seen a major erosion in his net worth as a result of the decrease in the share prices of the Adani company.
AEL’s development pattern
In 1988, Gautam Adani, a school dropout who had worked briefly as a diamond sorter and as the manager of a small plastics facility, founded AEL as a partnership company. He was 26 years old at the time. On March 2, 1993, it was formed and incorporated in Ahmedabad under the name Adani Exports Ltd. Later, to reflect changes to its business strategy, the name was changed to Adani Enterprises Ltd. The Registrar of Companies issued a new certificate of incorporation on August 10, 2006.
The business grew to be the nation’s largest private coal importer by acquiring mines in Australia, Indonesia, and India. Its sponsored power plant grew to be the biggest private generator of electricity. AEL joined the ports and airports industries as well. In May 2022, it purchased ACC and Ambuja Cements.
Company incubator
AEL claims to have incubated and successfully listed six “decacorn enterprises”: Adani Ports and Special Economic Zone Ltd., Adani Power Ltd., Adani Transmission Ltd., Adani Green Energy Ltd., Adani Total Gas Ltd., and Adani Wilmar Ltd.
present-day activities
With the goal of incubating, building, and developing an end-to-end integrated ecosystem for the production of green hydrogen, the firm is now putting up a green hydrogen ecosystem.
The production of renewable energy and green hydrogen itself, as well as the conversion of a portion of the produced green hydrogen into derivatives, such as green nitrogenous fertilisers, ammonia and urea, both for the domestic market and exports, are all included in this, according to AEL’s public issue prospectus.
In addition to managing and operating seven airports, the business is also building a new airport in Navi Mumbai. Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram all have airports. As of September 30, 2022, it has 14 road assets, three of which were operational.
AEL provides mining services such as contract mining, development, production-related, and other services. It also provides integrated resource management services for coal that entail obtaining coal from various worldwide pockets and delivering it to Indian consumers just-in-time. Additionally, it recently bought mines to carry out industrial mining operations.
Additionally, it produces, sells, and brands food FMCG items, and it is creating the super-app “Adani One” to support the group’s consumer-facing ventures.
The firm seeks to produce petrochemicals, copper and related metals, as well as strategic military and defence items that increase India’s self-reliance, according to the prospectus.
The board of AEL
The managing director of the company is Rajesh Adani, the younger brother of board chairman Gautam Adani. The board also includes Pranav Adani, the younger brother of Vinod Adani, who is Gautam.
Other members include Vinay Prakash, CEO of Adani Natural Resources, M Narendra, former chairman and MD of Indian Overseas Bank, V Subramanian, a former secretary in the ministry of new and renewable energy, H Nerurkar, a former MD of Tata Steel, Omkar Goswami, founder of CERG Advisory, and Vijaylaxmi Joshi, a former secretary in the ministry of panchayati raj.
GKaran, the CEO of Adani Ports, and Jeet, the vice president, are two of Gautam Adani’s sons (Group Finance).
According to the BSE website, AEL had revenues of Rs 26,824 crore and a net profit of Rs 720.70 crore for the fiscal year 2022. It recorded sales of Rs 22,136 crore for the second quarter that ended in September 2022 and a net profit of Rs 469 crore.