In a world where uncertainty topples the weak and wrecks havoc on the fragile, there are things and people that benefit from the same uncertainty. They grow exponentially when they are exposed to volatility and randomness. Author, statistician, and risk analyst Nicholas Nassim Taleb has coined a name for such people and things: Antifragile.
India has had no scarcity of such antifragile Indians. But in recent years, one name has emerged from the shores of Gujrat: Gautam Adani, chairman, and founder of Adani Group. Over the years, his business acumen, his positioning with powerful political allies have made him the second richest man in India ($25.2 billion).
The self-made man from Gujarat is currently the head of a plethora of companies that comprise India’s biggest ports as well as the largest private producer of electricity. Additionally, he also has a substantial stakeholding in sectors such as coal mining, gas and oil exploration, distribution of gas, infrastructure, real estate, to name a few. currently heads a group of companies that comprises India’s biggest private operator of ports as well as the country’s largest private producer of electricity.
Also, the Adani group has substantial interests in a variety of sectors: coal mining, oil and gas exploration, gas distribution, transmission and distribution of electricity, civil construction and infrastructure, multi-modal logistics, international trade, education, real estate, edible oils, and food storage.
Recently Adani and his group came into the limelight during the farmer’s bill protest. For more than 12 hours, #BoycottAdani was trending on Twitter. Farm leaders across the country have been displeased with mega-corporations being a stakeholder in the agrarian landscape, and with the new laws, the farmers fear that essential commodities would come under the corporations led by Adani, leading to monopolization in the agriculture sector.
To understand more about why Adani Group and its founder stands to benefit from such a move, we have to go back to the beginning of the man, his group, and his political positioning.
Humble Beginnings of Gautam Adani
Born and brought up in a middle-class Jain family, Gautam Adani’s own roots have been humble, to say the least. After dropping out of college, he began his career in the diamond markets of Mumbai. Eventually, he returned to his home state Gujrat and went on to work in a plastics factory that was run by his own brother.
With every new day, every new experience, Adani continued his journey and eventually set up his own commodity trading business. After that, there was no looking back. As the nation enjoyed its fastest growth rate in the 2000s, Adan started controlling the port of Mundra and eventually went on to build India’s largest private-sector port.
Adani’s group became India’s biggest privately-owned power producer and spread its roots in different verticals. The group has also become the leader in coal mining by expanding abroad, and it is the biggest privately-owned power producer in India.
Being Symbiotic Partner of Narendra Modi
Francis Underwood, the protagonist from the critically acclaimed political drama show House of Cards said something beautiful, “Power is a lot like real estate. It’s all about location, location, location. The closer you are to the source, the higher your value.” Adani is a living testament to the theory.
As Modi went on to become the chief minister of Gujarat, Adani positioned himself to be his ally. His exponential rise could be traced back to 2002. During the Gujarat riots that took the lives of over 1,000 people and made the then Chief Minister of Gujarat Narendra Modi a controversial figure, it was Gautam Adani who put his potential future on the line and was behind the Vibrant Gujarat, a summit that would put Modi on the world stage and cement Adani’s place as a businessman that isn’t afraid of placing his bet on the future.
Fast forward to 2018, Adani Group and Modi’s ties came under public scrutiny once again. In September-October 2018, the Modi government went on to award 126 contracts to companies to set up natural gas networks and fuel centers across the nation.
This event was special for two important reasons. First, it was noted that the number of contacts that were awarded was significantly more than those awarded under the Congress-led government: a mere 35.
Secondly, and more importantly, of these bids, the largest winners of these bids were, well, you guessed it right, Adani Group.
In the same year, Adani also went on to acquire Reliance Power’s electricity transmission business in Mumbai for Rs 12,300 crore. A man with hunger, Adani continued his acquisitions and went on to acquire GMR’s thermal power project in Chhattisgarh for Rs 5,200 crore, L&T’s port in Katupalli for Rs.1,950 crore, and KEC International’s owned power line.
In 2018, the Indian government permitted the privatization of six airports, with the permission, it also relaxed rules for bidding to widen the pool of competition, and importantly, to allow companies with no prior experience in that particular sector to bid. There was one clear winner from this change of rules, Gautam Adani and his Adani Group. His group went on to win the bid and scooped up all the six airports. With these 6 airports up his sleeves, Adani became India’s biggest private airport operator.
In Conclusion, Is the Economy a zero-sum game?
In Game Theory, a zero-sum game is a situation where one person’s win is equivalent to the other person’s loss.
With Adani Group’s accelerating control over the crucial sectors such as infrastructure, power, ports, economists think that this is creating monopolies and stifling any potential for competition.
The new farm bill, another policy change by Modi’s government, will now force the farmers to be associated with the bigger corporations. And who are these big sharks? It is the Adani Group, the Reliance group that are on their way to creating an agriculture cartel.
Some view that post-globalization, family conglomerates such as Ambanis, Adanis, Jindals have made the Indian economy a zero-sum game in which companies with the higher volume of stakeholding and cash flow will be enriching amongst themselves, and smaller companies will be pushed down into oblivion.