Business

Is Gautam Adani’s ascent sustainable?

For an investor, there has to be a business first, then profitability, then valuation, and then comes liquidity.” Adani Ports, they add, is the only Adani company to have crossed the first three barriers. Anil Tyagi
Vol. XIV October 2021

Adani Ports and SEZ should be the Adani Group’s crown jewel. As the company’s dominant port operator, not only is it a leader in its space but a cash cow to boot.As a fund manager in today’s story points out: “For an investor, there has to be a business first, then profitability, then valuation, and then comes liquidity.” Adani Ports, they add, is the only Adani company to have crossed the first three barriers.Adani Ports, however, isn’t the group’s most valuable company. It doesn’t even make the top three. Instead, Adani Green Energy takes gold, Adani Transmission takes silver, and Adani Total Gas gets the bronze. All three are also among India’s 20 most valuable publicly traded companies—entering the rarefied club just within the last year.

The shareholding patterns in the Adani Group companies in April last year it is  noted that that several of them shared common foreign portfolio investors (FPIs). In what’s ostensibly a response to this criticism, only one FPI owns more than 1% of Adani Green now, compared to 10 in December 2020. However, the total number of  FPIs holding stake in the Adani stocks has gone up.

More importantly, the criticism that no major domestic institutional investor had a meaningful stake in its stocks has also been tempered somewhat after the IPO-bound Life Insurance Corporation upped its stakes in multiple Adani Group companies. And given the gravity-defying rally that these stocks have been on over the past year, LIC’s additional purchases would have been very costly indeed.

The skyrocketing fortunes of many Adani companies owe as much (or more) to curious shareholding patterns and perceptions of government patronage as they do to the businesses themselves. Gautam Adani certainly isn’t complaining.

OK

Most Popular

To Top
LATEST ARTICLES
close slider
VOL.14 | ISSUE 1 | MARCH-APRIL 2020
CORRUPTION
FROM RAJ TO RAFALE 18: Loose Sheets, Diaries & Spreadsheets
COVER STORY
COVID19 : Cosmic Dance, Worldly Trance
COVER STORY
COVID19 : Systems Failure, Situation Critical
COVER STORY
COVID19 : The Economic Roulette Wheel
COVER STORY
COVID19 : Winds Of Change
STATE SCAN
Jyotiraditya Scindia : Overrated Turncoat
BOOK REVIEW
A Life in Secret
Bric-a-brac
Fighting for Central Hall
Bric-a-brac
Sick, and struggling
Bric-a-brac
Hooda, Tulsi in Rajya Sabha
Bric-a-brac
North and South faceoff
By the way
Yogi : No time for UP IAS week
By the way
Petronet largesse
BY THE WAY
Tackling Covid
BY THE WAY
Listing blues

We – and our partners – use cookies to deliver our services and to show you ads based on your interests. Information about cookies and their deactivation you can find in our Privacy Policy. By using our website, you agree to the use of cookies.

Powered by