(Bloomberg) -- At a public event where billionaire Gautam Adani sat close to India’s Prime Minister Narendra Modi, the Adani Group announced a plan to invest tens of billions of dollars, signaling that both its business ambitions and political goodwill were intact despite the founders’ legal woes in the US.
About 50% of the 7.5 trillion rupees ($88.5 billion) investment in the western Indian state of Rajasthan would be done over the next five years, Karan Adani, managing director of Adani Ports and Special Economic Zone Ltd. said Monday, as his father, Gautam, sat in the front row, a few seats away from Modi.
No details were shared on how this outlay will be financed. An Adani Group representative didn’t respond to an emailed query seeking clarity on this.
While such investment promises are more a statement of intent — and not a hard obligation — it seeks to show the group is continuing business as usual. To top it, Modi’s public appearance alongside Adani shows that the billionaire has not lost his political capital with the Indian government.
The show of confidence comes less than a month of Adani, Asia’s second-richest man, and his aides being indicted by US prosecutors for their role in a $265 million bribery scheme. The Adani Group has refuted the US allegations as “baseless.”
“We plan to build here the world’s biggest integrated green energy ecosystem” with 100 gigawatts of renewable energy, 2 million tons of hydrogen and 1.8 gigawatts of pumped-storage hydroelectricity, Karan said. “Beyond energy, Rajasthan is critical to our ambition to become India’s largest cement company.”
The Adani Group plans to set up four cement plants to add 6 million tons annual capacity, he added. Building a facility at Jaipur airport, Rajasthan’s capital city, and a logistics park are some of the other projects in planning.
Other Indian billionaires also made investment commitments to Rajasthan at Monday’s event.
While Gautam Adani did not speak at the event, it was his second public appearance since the US Justice Department’s bombshell dropped, accusing the billionaire, his nephew Sagar Adani, and one other group executive of securities and wire fraud.
Shock Indictment
The shock indictment had shaved $34 billion off Adani firms’ market value in less than a week, forced one of the companies to scrap a $600 million green bond sale, put seven Adani firms on ratings watch and prompted partners like TotalEnergies SE to suspend fresh investments.
The conglomerate has since last week been actively looking to reclaim the lost ground. On Dec. 1, Gautam Adani in his first public comments since the US action, said this was not the first time his empire had faced such challenges and that “every attack makes us stronger.”
Adani Group published a credit report Nov. 25 to reassure investors and creditors of Adani businesses’ robust financial health. It had a total debt of 2.58 trillion rupees ($30.5 billion) as of end September compared with cash and cash equivalents of 530.2 billion rupees, according to the report, as well as an asset base of $66 billion.
It’ll depend on the incoming President Donald Trump’s administration to vigorously pursue this probe — or not. Also, any extradition request for Adani will need cooperation from the Modi government. Adani, who hails from the same western Indian state of Gujarat as Modi, has often dovetailed his group’s strategy to Modi’s policy priorities.
--With assistance from Rakesh Sharma and Shruti Srivastava.
©2024 Bloomberg L.P.
