Middle class consumption will create $15 trn Indian economy: Gautam Adani

Group's focus is on creating long-term sustainable value, says businessman

Consumption by India’s middle class will help create a $15-trillion economy in two decades and give businesses opportunity for growth, said Gautam Adani, chairman of Adani group, on Monday as he rejected "reckless, irresponsible reporting" about the company’s shareholding in June.

Adani, who was addressing shareholders of the group's flagship, Adani Enterprises, India’s target to be a five-trillion-dollar economy in four years should not be doubted. “I personally see it as an inconsequential question. History has shown that, out of every pandemic crisis, there emerges several learnings – and I believe that India and the world are wiser as we go through this pandemic,” he said.

"India will be 5 trillion-dollar economy--and then go on to be a 15 trillion-dollar-plus economy over the next two decades. India will emerge as one of the largest global markets, both in terms of consumption size and market cap,” Adani said. "

“There will be bumps along the road, as has been the case in the past, and is expected to be the case in the future. However, there cannot be any doubt that the largest middle class that will ever exist, augmented by an increase in the working age and consuming population share, will have a positive impact on India’s growth very much in line with the demographic dividend India enjoys.”

For the Financial Year 2021, the consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of the group’s listed portfolio was over Rs 32,000 crore: a year-on-year growth of 22 percent. “All the Adani stocks generated returns over 100 percent – and our businesses ensured that we returned close to Rs 9,500  crore to you, our equity shareholders. This is a 166% increase in profit after tax on a year-on-year basis,” he said.

Talking about the recent drop in share prices, Adani said the group's focus is on creating long-term sustainable value. “Recently, a few media houses indulged in reckless and irresponsible reporting related to administrative actions of regulators. This caused unexpected fluctuations in the market prices of Adani stocks. Unfortunately, some of our small investors were affected by this twisted narrative in which some commentators and journalists seemed to imply that companies have regulatory powers over their shareholders and that companies can compel disclosure. In the long term, such diversions will not impact us,” he said.

Adani Ports and Special Economic Zone (APSEZ) had become an integrated ports and logistics company. In financial Year 2021, APSEZ crossed a landmark after its share of India’s port-based cargo business rose to 25% and the container segment market share grew to 41%. It continued to diversify further, with LNG & LPG business in Mundra added to the portfolio and LNG operations being added in Dhamra. “’No other company in the world runs a port business of such scale and reach,” he said.

Adani Green Energy, in 2020, became the largest solar company in the world. “’Last month, following the acquisition of SB Energy’s five-gigawatt portfolio, at an enterprise valuation of about $3.5 billion, we caught up to our renewables target of 25 gigawatts a full four years ahead of schedule. I know of no other organisation in the world that has accelerated its renewables footprint as rapidly as the Adani Group.”

Through Adani Enterprises, the group made its move into airports. Today, one of every four passengers in India flies through an Adani airport. “’No airport business in any large country has achieved a 25% share of the total passenger traffic. The company also took over operations of airports in Ahmedabad, Lucknow and Mangalore, signed concession agreements for Guwahati, Jaipur & Thiruvananthapuram, and is now in the process of acquiring the Mumbai and Navi Mumbai International Airports. In addition to developing our pan-India airport network, we are also increasing our focus to include non-passenger revenue and nurturing a range of possibilities within both – the physical and digital infrastructure.”

"Whatever businesses the group is in – seaports, airports, logistics, natural resources, thermal and renewable power generation, transmission, distribution, data centres, defence, agri and food, real estate, city gas utilities, and several others – I believe all of them are individually high growth businesses but, even more importantly, every one of them has adjacencies within themselves as well as new sectors we can move into,” he said.