Adani adds more billions to his wealth than 19 peers, closing in on Ambani

Among the 20 Indian billionaires on Bloomberg Billionaire Index, Adani’s fortunes have risen by $35.2 billion in 2021 so far, compared with a $24.5 billion addition in the combined wealth of 19 other Indian billionaires.

Worth $69 billion as of today, Adani is trailing the richest Indian Mukesh Ambani ($77 billion) by only a few billions now.

Other than Adani, eight other Indian billionaires have added $1 billion or more to their personal wealth in 2021. They are Wipro’s Azim Premji, whose wealth increased by $6.07 billion to $31.40 billion. Savitri Jindal of OP Jindal group added $4 billion to her wealth, while Lakshmi Mittal added $3.93 billion. Kumar Birla’s wealth jumped by $3.25 billion to $10.1 billion. Others included Dilip Shanghvi of Sun Pharma (1.66 billion), Radhakishan Damani of DMart ($1.6 billion), Pankaj Patel of Cadila ($1.44 billion) and Rahul Bajaj of Bajaj Auto ($1.18 billion). Uday Kotak is the only Indian billionaire to have lost $1 billion or more.

Mukesh Ambani, the richest Indian and Asian, has added $334 million to his wealth this year.

The $35.2 billion that Adani made in 2021 was worth Rs 2.56 lakh crore at Friday’s exchange rate of 72.83 a dollar. In value terms, this was second only to French luxury Tycoon Bernard Arnaut, who has added $47.9 billion to his personal wealth this year, Bloomberg Billionaire Index showed.

Data available with corporate database AceEquity suggests four of six listed Adani group stocks have rallied between 100 per cent and 260 per cent in 2021 so far, pushing them to the overvalued zone.

For example, Adani Total Gas has rallied 257 per cent so far this year, and over 1,400 per cent from the lows of March 2020.

“With 41 GAs under its belt, Adani Total is without doubt a strong growth story, loaded with the potential for becoming the largest CGD company in the country by sales volume. However in our view, the stock prices have already moved ahead of fundamentals, factoring in a prognosis for a very high rate of growth over a considerable period. We continue to retain our ‘unrated’ rating on the stock,” said YES Securities.

GAs stands for geographical areas and CGD for city gas distributors.

Adani Transmission, another Adani firm whose stocks have rallied 232 per cent in 2021 so far, has seen CLSA drop coverage on the scrip, saying the stock is driven by speculative interest and lack of ‘real’ effective liquidity’, keeping the valuation at a stratospheric 16 times premium to the sector. It had a ‘sell’ rating and target price of Rs 146 on Adani Transmission.

Up 232 per cent this year, the scrip has added Rs 1.11 lakh crore to its market cap this year. This scrip has jumped over 700 per cent from March 2020 levels.

Nonetheless, Adani Transmission, along with Adani Total Gas (up 257 per cent this year) and

(up 175 per cent), are the three of the six stocks that will enter MSCI India Standard Index from May 27.

For

, Edelweiss said the company’s 25 per cent capacity is untied and that is likely to put financials under stress given lower merchant rates.

“In our view, APL is likely to benefit due to higher merchant prices or likelihood of inking PPAs over the medium term. However, there’s still a lot to be desired for improving the financial position of the company,” Edelweiss said in a May 7 note and recommended a ‘reduce’ rating on the stock.

Edelweiss said Adani Power’s balance sheet continues to be under pressure as the receivables position has further deteriorated. While the debt-to-equity ratio has improved to 4 times from 8 times in H1FY21, it was due to the issuance of Rs 4,000 crore worth of perpetual securities, which were classified as equity.

“Free cash flows of Rs 3,200 crore during FY21 was not sufficient to cover the interest burden of Rs 5,000 crore (additionally, principal repayments). Liquidation of Rs 15,000 crore claims raised could improve the overall position materially,” it said.

Adani Group has been buying out ports and troubled utility companies with good assets over the past few years. Analysts said the group has in the past managed to turn around its inorganic bets. It is believed that as and when the economy recovers, such assets will start adding to earnings in a big way.

In the case of Adani Ports, the company’s aspiration of becoming an integrated transport and logistics utility gathered steam with four acquisitions in FY21 worth Rs 25,000 crore. The company has gained market share from major ports due to its thrust on integrating inland logistics through Adani Logistics and Adani Rail, among others.

“We expect the trend to continue beyond FY21 with Adani Ports acquiring new port assets on the east coast, substantially improving its overall port networks on both the coasts and enhancing service offerings,” Nomura India said in a recent note.