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How ADANI’s Genius/RISKY DEBT STRATEGY fuelled the SUPERFAST expansion of ADANI Group? : Case study
The Adani group is one of the most iconic businesses in Indian business history! and what’s absolutely mind-boggling about them is that in the past 10 years, the Adani group single-handedly went on to become India’s largest private port operator, largest coal importer, coal miner, private power producer, city gas distributor, and the largest edible oils importer in the country!
They have been buying giant companies as if you and I would buy a pair of Sneakers. for example, In 2018, the group bought Reliance transmission for Rs 12,300 crore, GMR Chhattisgarh for Rs 5,200 crore, Katupalli port for Rs 1,950 crore, and paid Rs 228 crore for the power transmission line between Bikaner and Sikar. This 1 year of shopping alone adds up to Rs 19,687 crore! and as we all saw, this year they bought Ambuja and ACC for 81,000 cr and became the second largest cement manufacturer overnight!!
And as a result of this incredible speed of expansion, in the past 5 years, the stock price of each of these companies has shot up by an insane rate, while Adani Power has shot up by 800%, Adani enterprise has shot up by 2400% Adani Green has shot up by a mind-boggling 5000%
And while most of us would just be awestruck at these figures, very few people realize that the Adani group is not sitting on a mountain of profits but a mountain of Debt!!
and the point to wonder over is here is that, while Tata group and Reliance both have Cash cows in the form of TCS and Petrochemicals, the Adani group does not have a super profitable business to bank on yet!!! But even then they have managed to gather a debt of 2.2 Trillion Rupees!!
So the question is, how is Adani getting such a heavy loan to buy so many companies?
What exactly is their strategy and what are the study materials to help you better understand this debt strategy of the Adani’s?