Monday, March 14, 2016

Gautam Adani: From plying scooter to owning planes and ships


































Gautam Adani



This is one of the classic rags to riches stories. At the age of 18, he dropped out of college due to lack of money and went to Mumbai with a few hundred rupees.


 He worked there in a company as a diamond sorter and then started his own business of diamond broking. He was called back to Ahmedabad to work in his brother’s plastic factory where he started his own export firm.

He leased many ports, purchased several coalmines in India and abroad, and bought a number of ships to bring coal to his own ports. He constructed railway lines to transport coal from his mines to his ports and goods from his ports upto the rail network. He is the largest private producer of electricity in India.


      Adani Port

Background

Gautam Adani was born in a Gujarati Jain family on June 24, 1962 in Seth ni Pol area in Ratanpol in Ahmedabad in Gujarat, India. He is the son of Shantilal and Shanta Adani. 

He has seven siblings and is the fourth of the five brothers. His parents had migrated from the town of Tharad in the northern part of Gujarat to Ahmedabad in search of work to support their eight children.

 He did his schooling from Seth C.N. Vidyalya in Ahmedabad. Later, he took admission in Gujarat University to take a bachelor’s degree in commerce.  He could not complete the course due to his economic circumstances and dropped out in the second year.


He moved to Mumbai at a young age of 16 in the year 1978 with only a few hundred rupees in his pocket. He started his career working as a diamond sorter at a firm called Mahindra Brothers. He was a quick learner, and within two years, started his own business to become a diamond broker in Zaveri Bazaar of the city. The trading initiative was a success and he earned his first one hundred thousand rupees within a year. It was a big amount during the early 1980s.


In 1981, his elder brother, Mansukhbhai, bought a plastic unit in Ahmedabad and asked Gautam to come back to help him. He complied. The plastic unit needed 20 tons of PVC (polyvinyl chloride) every month. It was a key raw material for the manufacture of plastic. However, IPCL, the sole producer of that material in India at the time, was not in a position to supply more than two tons a month.

From scooter to planes



 Adani couldn't speak English

There was a time when Gautam Adani used to move around in Ahmedabad on his grey Bajaj Super scooter during the 1980s while his childhood friend Malay Mahadevia, a dentist by profession, rode on the pillion. Adani’s English speaking power then was somewhat weak and he hesitated while talking to the government officials. Mahadevia used to help him in this regard. Now Mahadevia is an important director in the Adani Group.

After sometimes, Adani graduated to a Maruti 800 car.

 He owns three jets and three helicopters for his personal use; sometimes, he lends these flying machines to his friends, ministers and chief ministers.

Personal cars and planes

Now his garage is full of expensive cars. He also owns several BMWs, including a BMW 7 series, and a red Ferrari. Earlier, he used to travel by train in second class. Now he owns a fleet of three helicopters and three planes. He has a Beechcraft that he purchased in 2005 and a Hawker that he bought in 2008. Later, an EMB-135BJ Embraer aircraft was also added to the fleet.

He has built a helipad at his home behind Karnavati Club on SG Road, Ahmedabad. He uses a helicopter to reach the city airport where his two jets are parked. It takes five to seven minutes to reach the airport from his home by helicopter and forty minutes by car.

According to Forbes magazine, he was the sixth richest man in India in September 2014 with a net worth of about $7.1 billion. He dreams of creating a mammoth $100 billion enterprise by the year 2025. 

On August 15, 2015, one US dollar was equal to Rs 65.13. Therefore, $ 7.1 billion was equal to about Rs 46,242 crore and $100 billion was worth about Rs 6, 51,300 crore.





Adani came out of nowhere to dominate the infrastructure sector of India. His group has interests in food and energy, power generation and transmission, coal and mining, oil and gas exploration, gas distribution and ports as well as Special Economic Zones (SEZs) etc. He is a first-generation entrepreneur.


Some interesting facts

Karan Adani




Gautam Adani’s son, Karan Adani, married Paridhi Shroff, the daughter of Cyril Shroff, the co-owner of Amarchand Mangaldas that is a leading and very influential law firm in the country. 

The marriage was held in Grand Hyatt resort in Goa and was one of the most lavish marriages held in India in recent times. It was followed by a grand reception in one of the premiere clubs of Ahmedabad. 

A large number of guests were invited from India and abroad to attend the marriage and the reception. An exclusive function was held at Mundra Township for the employees of the Adani Group. Narendra Modi also attended the marriage of Adani’s son.


Karan Adani has a management degree from Purdue University in the US. He is currently the executive director of Adani Ports & SEZ Limited. Though born with a silver spoon, Karan is a very humble person and does not take his father’s riches for granted. He sometimes goes to Mundra by train even though his father owns several planes.

Food




Adani created a joint venture in edible oil refining by forming Adani Willmar in 1999. It owns ‘Fortune’, India’s largest edible oil brand through a joint venture with Willmar of Singapore. Fortune cooking oil became the number one edible oil brand in India within twenty months of its launch. Adani Willmar is the largest manufacturer of edible oil in India with a market share of about 45%. It is the sixth largest food company in India.

Adani group logo


  Modi-a protégé of L K Advani




Between 1995 and 2001, the Gujarat politics in general and the state politics of the Bharatiya Janta Party (BJP) in particular, went through a period of great upheaval. The Gujarat Assembly elections were due in 2002. The state was struck with a devastating earthquake. 

The BJP leader, LK Advani, replaced the Gujarat chief minister Keshubhai Patel with Narendra Modi. While choosing Modi, the senior state leaders like Suresh Mehta and Kashiram Rana were ignored by Advani as he himself was planning to make a run for the post of the prime minister of India. 

Gujarat was important for the BJP. To make sure that he controlled the state, Advani wanted an outsider to be in charge of Gujarat who would be dependent on the party high command for his legitimacy.


Modi took charge in Gujarat in 2001, knowing that he would have to win the state elections. However, he did not want to depend upon Pramod Mahajan, who was managing the BJP’s finances.  Modi wanted his independent sources of funds. It was not easy. The business and industry was suspicious of him as he was an RSS man. 

Modi himself also was suspicious of the industry. Initially, Modi kept all businessmen at an arm’s length. He suspected that they were taking an undue advantage of the state economy.


In the beginning, Modi distrusted Adani also and thought that he was too close to Keshubhai. Adani tried to enter the inner circle of Modi. It took Adani about a year to succeed in these efforts. In February 2002, communal riots broke out in Gujarat, which continued for about three months. Several hundred Muslims and Hindus were killed. 


Narendra Modi who was the chief minister of the state was accused of condoning the violence and even of complicity in it. It should be mentioned here that in 2012, a Special Investigation Team (SIT) appointed by the Supreme Court of India cleared Narendra Modi of the charge of complicity in the violence. The SIT also rejected the claims that the state government had not done enough to prevent the riots.

Other Political Parties

Adani has maintained relations with leaders of all political parties. According to media reports, Robert Vadra, the son-in-law of the Congress president, Mrs. Sonia Gandhi, visited Mundra in 2009 to have a look at the projects undertaken by the Adani Group. He had travelled to Mundra in a private aircraft owned by the group.


Adani is known to have close links with the Nationalist Congress Party leader and Agriculture Minister in the UPA government, Sharad Pawar. When Maharashtra Deputy Chief Minister Chhaggan Bhujbal organised a function on the occasion of the appointment of Pawar as president of the International Cricket Council, Adani also was invited to attend. Adani has a coal-based power project in Vidarbha, the constituency of Pawar.

Adani was also successful in building up a rapport with Kamal Nath during his stint as commerce minister in the first United Progressive Alliance government. When Kamal Nath was appointed union minister of road transport and highways, Adani is believed to have sought his advice for his plans to expand his infrastructure projects.


It is claimed that over the years, the Adani Group has firmly integrated politicians, bureaucrats and the judiciary into its operations. He works very closely with the Gujarat Government. Most of the ex-IAS officials in the state have joined the Adani Group.

PM Modi




Gautam Adani enjoys a special relationship with Prime Minister of India, Narendra Modi. Many people claim that the steep rise of Narendra Modi in the Gujarat politics and then in the national politics coincided with the rapid growth of the Adani Group.


Much has been reported about his close relationship with Narendra Modi. But he has been extremely close to previous regimes in Gujarat headed by Shankersinh Vaghela, Chimanbhai Patel and Keshubhai Patel as well. 

All regimes allocated land to Adani in and around Mundra at cheaper rates than what the Modi government later charged him.


Modi’s political opponents claim that Adani was favored with cheap land by the state government. During Modi's tenure as Gujarat’s chief minister, Adani constructed his Special Economic Zone, bought mines in Indonesia and Australia and launched Asia's largest coal import terminal in Mundra Port


He once told the CNN-IBN channel that during the Congress party rule he purchased the land at the rate of just 10 paise per square meter in the 1990s. He paid on an average Rs 15 for every square meter of land during the BJP rule. 

Prime Minister Narendra Modi addressed over 150 rallies across the country during the May 2014 Indian parliamentary elections. On an average, he travelled about 1,100 km a day. He used to return daily in the evening to Ahmedabad. It was made possible by a fleet of one jet and two helicopters. All those aircraft belonged to the Adani Group.


The BJP won the parliamentary elections on May 16, 2014 and Narendra Modi was appointed prime minister of India later that month. Even before Modi formed his government at the centre, the shares of various Adani companies soared and his businesses benefited.


When President Barack Obama of the US visited India, Adani was one of the 17 members of the Indian delegation to the Indo-US CEO forum meeting in New Delhi. It is said that the prime minister himself cleared his name at the last moment.





Gautam Adani was among the Indian businessmen who travelled with Prime Minister Narendra Modi during his first official visit to Australia in November 2014. The Adani Enterprises signed a Memorandum of Understanding with the State Bank of India in the presence of the prime minister of India to line up a credit facility of up to $1 billion for the coalmine, rail and port project in Australia. That loan, however, faced several difficulties later.

When Chinese premier Xi Jingping came to India, one of the two industrialists he met and interacted with was Adani.


It is a fascinating journey from having a scooter to a position when the future prime minister of the country uses your planes during his election campaign.

Gautam Adani at a glance

1.      Gautam Adani dropped out of college due to lack of money. According to Forbes magazine, he was the sixth richest man in India in September 2014 with a net worth of about $7.1 billion, about Rs.46, 242 crore.

2.      He is a first-generation entrepreneur. His group has interests in food and energy, power generation and transmission, coal and mining, oil and gas exploration, gas distribution and ports as well as Special Economic Zones (SEZs) etc.

3.      Now the Adani Group operates nine ports in India. Four of them, Dahej, Hazira, Kandla and Mundra are in Gujarat; Vizag is in Andhra Pradesh; Ennore is in Tamil Nadu; Murmugoa is in Goa; Dhamra is in Orissa and Vizhinjam is in Kerala. He is establishing one port in Australia as well.

4.      Gautam Adani ventured into coal trading in 1999. His group has become India's largest private coal mining and trading conglomerate. It imported 43.5 million tons and 58.4 million tons of coal in 2014 and 2015 respectively.

5.      Adani has taken the Abbot Point port and Carmichael mine in Australia on lease. He will get coal from that mine, will transport it through his own 400- km railway line to that port, and then ship it from there in his own ships to his own Indian port from where it will be taken to his own power plants to produce electricity.




Adani electricity

6.      He was among the Indian businessmen who travelled with Prime Minister 
Narendra Modi during his first official visit to Australia in November 2014. The Adani Enterprises signed a MoU with the State Bank of India in the presence of the prime minister of India to line up a credit facility of up to $1 billion for the coalmine, railway line and port project in Australia.

7.      With Willmar of Singapore, he created a joint venture, Adani Willmar, in edible oil refining.  It owns ‘Fortune’, which is India’s largest edible oil brand. Adani Willmar is the largest manufacturer of edible oil in India with a market share of about 45%. It is the sixth largest food company in India.

8.      In 2003-04, the Adani Group established the Special Economic Zone (SEZ) near Mundra. The group has leased 7,350 hectares of land in Mundra.

9.      In the year 2009, the Adani Group started a 330 MW thermal power plant. Now it has several power projects spread across the country. In the year 2015, this group had 10480 MW capacity and thus it became the number one private power producer in India. Earlier the Tata Group held this position. The Adani Group intends to generate 20,000 MW power by the year 2020.

















Adani hospital, Mundra

10.  Gautam Adani enjoys a special relationship with Prime Minister of India, Narendra Modi. During the 2014 parliamentary elections, Narendra Modi was seen traveling in Adani’s helicopters and planes to attend the rallies across India.

11.  He has maintained relations with leaders of all political parties, including the Congress and the Nationalist Congress Party.

12.  All the businesses of Adani belong to the infrastructure sector. A core competence of the Adani Group is getting their projects cleared faster.

13.  Adani thinks big; is ambitious; is warm in welcome; is a man of few words; hates bragging; and is a fatalist. He has seen money coming and going; but he is neither happy on getting the money nor is he sad when losing it. Bonds in his family are strong; he never went on a holiday without her mother. He gives full freedom to his employees and values them.

14.  Adani has relied on debt to finance his projects. His strategy has been to start a business, make it successful and take loan on the strength of this business to finance the other business and to take another loan on the basis of that business to finance yet another business. This process goes on and on.

Once in 1997, Anis Ibrahim, the brother of Dawood Ibrahim, kidnapped Gautam Adani. He is believed to have secured his freedom after paying a ransom of Rs 3 crore. Adani has never confirmed this claim. He prefers not to discuss this episode of his life.

Excerpted from Iqbal Amrohi article in Global Recorder



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