Gautam Adani’s Rise To 3rd Richest Came As Stock Jumps Topped 1,000%
He first rose to the position of richest man in Asia. Then, his net worth eclipsed that of Bill Gates and Warren Buffett. He is now rapidly nearing a level of wealth that only Jeff Bezos and Elon Musk can match.
By just about any standard, Gautam Adani’s rise has been nothing short of extraordinary. His net worth has nearly doubled, rising from $64.8 billion to $141.4 billion, making him the third-richest person on the earth, according to the Bloomberg Billionaires Index, during a year in which many people throughout the world have lost their fortunes.
His increasing wealth has drawn new attention to the company valuations he has built, the leverage he has built into his business empire, and his connections to the Indian government.
Adani Enterprises Ltd. and Adani Transmission Ltd. are valued at more than 400 times profit, while Adani Green Energy Ltd. and Adani Total Gas Ltd. trade at more than 750 times profit. In contrast, the price-to-earnings ratios of Bezos’ Amazon.com Inc. and Musk’s Tesla Inc. are around 100, while Mukesh Ambani, another billionaire Indian, is trading Reliance Industries Ltd. at 28 times.
The 60-year-old Mr. Adani has adjusted the emphasis of his company in accordance with what Prime Minister Narendra Modi views as essential to achieving India’s long-term economic ambitions. He has achieved this in part by using debt to drive his company’s growth, which prompted CreditSights, a Fitch Group arm, to label his business “seriously overleveraged” in a study last month.
The Adani Group reacted by claiming that over the previous ten years, it has improved its debt measures and that the leverage ratios of its portfolio companies were now “healthy” and appropriate for their particular industries. According to the group, net debt has decreased from 7.6 times profits before interest, taxes, depreciation, and amortisation to 3.2 times. At the same time, loan collateral has decreased from highs reached in 2020, when Mr. Adani and his family were forced to boost collateral due to a stock market crash caused by Covid.
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