For the past few years, the title of Asia's richest person has been held by two Indian tycoons: Gautam Adani and Mukesh Ambani. Their respective conglomerates, the Adani Group and Reliance Industries, cast a long shadow over the Indian economy.
Living in India means you might be using Ambani's internet and Adani's electricity. You might shop on Ambani's e-commerce platform, buying goods imported by Adani, fueling your car with Ambani's petrol on roads built by Adani. You might watch shows produced by Ambani and travel through airports operated by Adani. Their empires are inescapable.
While Ambani has been dubbed "India's Rockefeller," Adani emerged as a force to be reckoned with in 2020. He became the world's fastest-growing billionaire that year, claiming the title of Asia's richest and the world's second-richest person. However, his reign was short-lived. In 2023, a short-selling report by a Wall Street firm sent his empire tumbling down, making him the world's fastest-falling billionaire.
Let's delve into the stories of these two powerful figures who dominate India's business landscape.
The Meteoric Rise of Gautam Adani
Born in 1962 in Gujarat, India, Gautam Adani hailed from a middle-class family. His father was a textile merchant, instilling in him a keen interest in business from a young age. Adani dropped out of college during his second year to start a small PVC import business.
In 1988, at the age of 26, he founded Adani Exports, the precursor to the Adani Group, focusing on import-export trade. The business expanded from PVC materials to agriculture and power.
The year 1991 marked a significant turning point for India, with the country embarking on comprehensive economic reforms and embracing market liberalization. This included the privatization of many state-owned businesses. Adani seized this opportunity, and in 1995, he secured a lease for a port in his home state of Gujarat from the government. This strategic move propelled his trading business to new heights, further amplified by the wave of economic liberalization.
By 2000, Adani had become a prominent business leader in Gujarat. However, he was still relatively unknown on a national scale. His next leap forward can be attributed to a crucial alliance.
In 2001, Narendra Modi became the Chief Minister of Gujarat. This marked the beginning of a close relationship between Modi and Adani, characterized by a mutually beneficial exchange of political and commercial favors. This alleged quid-pro-quo saw Adani allegedly receiving favorable land deals from the government in exchange for supporting Modi's political ambitions.
For instance, while the government typically sold land to private companies at a price of ₹470 to ₹1,110 per square meter, Adani reportedly acquired land at significantly lower rates, sometimes as low as ₹1 per square meter. These dealings, though never proven, fueled speculation and cemented the perception of a close alliance between the two men.
This alliance deepened when Modi ran for Prime Minister in 2014, reportedly utilizing aircraft and helicopters provided by the Adani Group for his campaign. Modi's success in the election saw Adani's stock prices triple, further cementing the public perception of their interconnected fortunes.
In 2018, the Adani Group, despite having no prior experience in the aviation industry, secured all six airport privatization bids, becoming India's largest private airport operator. The Adani Group now comprises seven publicly listed companies, with operations spanning power generation, mining, power transmission, airports, natural gas, renewable energy, food processing, and infrastructure.
Adani has consistently emphasized that the Adani Group is deeply intertwined with India's growth story. This narrative has been effective in shielding the company from criticism, as questioning the Adani Group is often framed as an attack on India's national interests.
The Legacy of Dhirubhai Ambani and the Rise of Mukesh
Born in 1957, Mukesh Ambani, five years Adani's senior, inherited his business acumen from his father, Dhirubhai Ambani. Dhirubhai founded Reliance Commercial Corporation in 1958, a company that would later become synonymous with India's economic growth.
Starting with a polyester filament yarn business, Reliance expanded into textiles, leveraging Dhirubhai's political connections to navigate the country's complex licensing system. The company went public in 1977, marking a turning point in India's corporate history.
Mukesh, then 19 years old, joined his father's business after dropping out of his MBA program at Stanford at his father's insistence. Together with his younger brother, Anil, they propelled Reliance into new sectors, including petroleum and telecommunications.
By the early 2000s, Reliance Industries had become India's largest corporation, with the Ambani family enjoying unparalleled recognition and influence. However, this success was soon overshadowed by tragedy.
A Family Divided: The Ambani Brothers' Feud
Dhirubhai Ambani's death from a stroke in 2002, without a will or succession plan, triggered a bitter feud between Mukesh and Anil. The battle for control of Reliance, a conglomerate crucial to India's economy, captivated the nation.
The feud was eventually settled in 2005 with their mother's intervention. Mukesh gained control of the oil, natural gas, petrochemicals, refining, and manufacturing businesses, while Anil took over power, telecom, and financial services.
While the division seemed equitable, Mukesh had secured the most profitable and strategically important sectors. Anil's businesses, particularly telecom, struggled, eventually requiring a bailout from Mukesh to avoid jail time.
Mukesh Ambani's Reliance: A New Era
Despite the family feud and the loss of their patriarch, Mukesh steered Reliance to even greater heights. He consolidated Reliance's dominance in its core businesses while venturing into new areas, establishing India's largest retail chain in 2006 and re-entering the telecom sector in 2016.
The launch of Reliance Jio, a 4G telecom network offering free voice calls and dirt-cheap data plans, disrupted India's telecom industry. Jio's aggressive pricing strategy sparked a telecom war, propelling it to become India's largest mobile network operator.
Under Mukesh's leadership, Reliance Industries' market value has increased fortyfold since his father's death, making him Asia's richest person since 2019. His flamboyant lifestyle, epitomized by his opulent 27-story residence in Mumbai, contrasts with his father's humble beginnings.
Two Empires, Two Paths
While both conglomerates boast market capitalizations exceeding \$200 billion, their foundations differ significantly. Adani's empire is built on government contracts and infrastructure projects, while Reliance's foundation lies in its diverse portfolio, led by oil, retail, and telecom.
Adani's meteoric rise in wealth and the staggering growth of his companies, with their stock prices surging more than twentyfold in recent years, has raised eyebrows. His close ties to the government, coupled with allegations of financial irregularities, have fueled skepticism about the sustainability of his success.
Hindenburg's Short-Selling Report: A House of Cards?
In January 2023, Hindenburg Research, a US-based short-selling firm, published a report accusing the Adani Group of stock manipulation and accounting fraud. The report alleged that Adani and his associates controlled a disproportionate amount of the company's shares through a network of offshore shell companies, allowing them to manipulate stock prices and inflate the company's value.
The report sent shockwaves through the market, causing the Adani Group's stock prices to plummet and wiping out billions of dollars from Adani's net worth. Adani vehemently denied the allegations, but the damage was done.
The Aftermath: A Tale of Two Billionaires
As of October 2023, Mukesh Ambani has reclaimed his title as Asia's richest person, while Gautam Adani's net worth has plummeted, placing him on par with China's bottled water tycoon, Zhong Shanshan. While Adani's future remains uncertain, especially with the upcoming general elections in India and Modi seeking a third term, Reliance continues to be seen as a pillar of the Indian economy.
The contrasting trajectories of Adani and Ambani highlight the complexities of wealth creation in a developing economy like India. While one built his empire through political connections and aggressive expansion, the other inherited a legacy and transformed it through strategic acquisitions and disruptive innovation. Their stories raise important questions about crony capitalism, wealth inequality, and the role of big business in a democracy.