It is hard to believe that a 100-year-old Keynesian statement made at a time whentelecommuting and global e-commerce were not even nebulous ideas could still ring sotrue.
'He could order by telephone sipping his morning tea in bed the various products ofthe whole earth in such quantity as he might see fit and reasonably expect their earlydelivery upon his doorstep. He could at the same moment and by the same means adventurehis wealth in the natural resources and new enterprises of any quarter of the world.'
This appeared in John Maynard Keynes' influential best-seller The EconomicConsequences of the Peace first published in 1919 when the word globalisation hadnot even been coined (it first showed up in its modern meaning only in 1930). The fact isthat globalisation did exist even then except that the pace was sedentary in comparisonto today's world.
Some Things Never Change
If Keynes' time is remembered for the gradual globalisation of social and economiclife our time will be remembered for the unbridled pace at which globalisation isenveloping our lives driven by the ubiquitous reach of the internet. The consequences arestill emerging as our world's political cultural and economic barriers dissolve fasterthan ever before in a dual solvent of global interdependence and hyper interconnectivitythat are creating unprecedented new opportunities new business models and several newchallenges.
Of all the challenges however one of the most significant consequences ofglobalisation has been pandemics - and the most difficult of them has been COVID-19. Whilethis is no surprise given that pandemics like the Asian Flu of 1957 spread through tradeand travel routes it is obvious that the world was just not prepared for the explosiverate of spread of a pandemic of COVID- 19's scale. This has exposed several of thefragilities of global interdependence that will need to be fixed and each country isexpected to do it differently.
Curiously though the remedy for this malady is coming through the process ofglobalisation as evidenced by the worldwide collaboration on accelerated genomesequencing vaccine development and vaccine manufacturing. Therefore paradoxically boththe problem and its solution lie in our embrace of globalisation.
Learnings During a Crisis
There is no denying the fact that while COVID-19 has challenged every nation India'ssize and population density have made it a harsher challenge. Indeed the pandemic frozeeconomic priorities and forced the world to divert time and resources to manage thecrisis as did India.
No one denies that India could have done much better and that every life lost is atragedy. However as the world races to vaccinate its people we see India beingcriticised repeatedly for not doing enough to protect its own. Sometimes it is worthkeeping in mind that India has more people than the combined population of EuropeNorth America and Oceania. In other words our country is facing a challenge bigger thanwhat three continents are facing at a time when every nation is maximising what itcan do for its own people and has far better healthcare infrastructure built over severaldecades. Given that our vaccination effort is bigger than the combined efforts of 87countries it is only fair to take a step back and determine the scale of thechallenge our nation has confronted.
In this context I believe that the Atmanirbharta initiative launched by theGovernment is a transformational and correct step in our nation's journey.
The COVID-19 pandemic has demonstrated to most nations across the world that freemarket economies cannot be at the cost of self-reliance. We must believe in our owncapabilities and must be able to depend on it for economic construction especially intimes of crisis. Therefore the five pillars of Atmanirbhar Bharat - EconomyInfrastructure System Vibrant Demography and Demand - are a necessity to ensure oureconomy builds the intrinsic robustness to manage disruptive black swan events likeCOVID-19. The definition of a free-market economy will undergo a change in a post-COVID-19world and we must unhesitatingly write our own definition. After all not only is Indiathe world's largest democracy but it is also the world's most unique and boldestexperiment with democracy. One size does not fit all and it is increasingly evident thatthe phenomenon of hyper-globalisation that created the unrealistic expectation of beingthe panacea for efficient manufacturing and services across the world has been oneimportant cause of much of the inequalities we are witnessing today. Therefore only whenwe are able to fully mobilise the efforts of our own people will we be able to develop oureconomy in a way that we can take advantage of our country's demographic dividends that wehave not yet been able to fully unleash. COVID-19 is a wakeup call for all of us totransform ourselves. There cannot be a better time for us to commence the journey towardstrue self-reliance (Atmanirbharta) for accelerating the building of our nation inthe post-COVID-19 world.
Organisational Values as a Platform for Numbers
The past year has been one that further reinforced my belief in the values of anorganisation. About a decade back we chose Courage Trust and Commitment as theguiding values that would determine our actions and today I credit the resilience thatwe have demonstrated to the stoutness of these values. It strengthens my confidence in ourorganisation's fortitude and this has been demonstrated in the results of our Group. Notonly has the Adani Group emerged as India's benchmark for market leadership in difficulttimes but we have also broadcast our organisational ability to rapidly pivot in the rightmarket direction. An exciting example of this agility is our expanding partnership withTOTAL (now TotalEnergies) who are strategically increasing their renewables portfolio.
These developments exemplify the resilience of our diversified business across sectorsindustries and geographies. Despite a pandemic-induced large-scale disruption in economicactivity all six of our listed entities posted results significantly above marketexpectations and some of these record highlights appear below.
Capacity addition sweating of assets and a relentless focus on operationalexcellence and efficiency ensured that the EBITDA of our listed portfolio registered ayear-on-year growth of 22% (H32337 crore in 202021).
The return to equity shareholders (PAT) increased by a significant 166% on ayear- on-year basis (H9415 crore in 2020-21).
All Adani portfolio stocks gave returns over 100% and outperformed index by asignificant margin (Nifty-50 gave a return of 71%).
Adani Green Energy Limited (AGEL) added 925 MW operational capacity achieved ahigh consistent Solar CUF of 22.5% and Wind CUF of 26.8%.
Adani Transmission Limited (ATL) added 2536 ckt km to its network reaching17276 ckt km and sold a record 7169 Million units during the year.
Adani Ports and Special Economic Zone (APSEZ) achieved a cargo volume of 247 MMT(up by 11%) and reached a market share of 25% a gain of 4% points.
Adani Total Gas Limited (ATGL) added 102 CNG stations 500 commercial and 40939domestic customers achieving a combined volume of 515 MMSCM (CNG+PNG)
APSEZannounced four acquisitions KPCL GPL Dighi Ports & SRCPL thus improving East Coast - West Coast parity.
It also announced the setting up of a container terminal at Colombo port in partnershipwith John Keells and SLPA.
Adani Enterprise Limited (AEL) took over operations of airports at AhmedabadLucknow and Mangalore signed concession agreements for Guwahati Jaipur &Thiruvananthapuram and is in the process of acquiring Mumbai International AirportsLimited (MIAL) & Navi Mumbai International Airport Limited (NMIAL) airports.
AGEL fortified its partnership with TotalEnergies who acquired a 50% stake inits 2.35 GW portfolio of operating solar assets and 20% equity stake in AGEL from thefounders for an investment amounting to USD 2.5 Billion.
While we can look back and feel satisfied about our results
I believe that the real phase of accelerated growth of the Adani Group as an entitythat benefits from having a portfolio of companies with several strategic adjacencies isonly now gathering momentum. This helps us bridge the B2B to B2C gap in unique ways andwill encompass our new businesses like Airports
Data Centres Defence and several others. What we have built over the past two decadesis India's largest integrated and yet diversified infrastructure business that is nowmanifesting itself as an integrated 'platform of platforms' and moving us closer tounprecedented access to the Indian end consumer. I know of no business model akin to ourswith access to an unlimited B2B and B2C market over the next several decades.
Building the Template for Capitalising on Trends
While we are known as an organisation that makes swift decisions our foray into theworld of renewables and clean energy has further allowed us to templatise our expansionprocess and has given us the confidence to move into several new sectors as has beenincreasingly evident with our diverse business portfolio. As an example it is worthnoting that the thought process of accelerating our clean energy footprint was seeded asrecently as in 2020 (at the Davos World Economic Forum in January 2020). From my meetingsat Davos two things had become evident.
First - Climate change had become the defining issue of our time and climate changeaction must be accepted as a global national and personal responsibility.
I Second - With India driving one of the largest consumption growths our country wouldhave to play a defining role as it balanced its need to provide affordable electricity toits citizens as well as accelerate its renewable energy ambitions.
It was at Davos that I decided we must align with our nation's perspective on renewableenergy - and set ourselves the goal to be the world's largest solar power producer. I alsodecided that a significant part of our Group's future investments must be focused onsustainable and renewable energy. On the 22nd of January I penned down mythoughts and the Group's ambitions in a LinkedIn article wherein I wrote: "Ourvision is to become the world's largest solar power company by 2025 and thereafter theworld's largest renewable power company by 2030". I also stated that we would "build25 Gigawatts by 2025 and also become the world's biggest solar player". Ourexisting portfolio of renewable power at that time stood at just 2.5 Gigawatts.
We moved fast since January 2020 and my focus has been on building an organisation thatcan add an unmatched 5 Gigawatts of generation capacity every year over the next decadeand foster a cleaner energy future. So far we are very much on target. Let me highlightsome of the milestones:
Five months following the promise at Davos in Q2 of 2020 we won the world'slargest solar tender when SECI awarded us 8 Gigawatts through a competitive biddingprocess.
Thereafter in Q3 of 2020 Mercom reported that we had become the world'slargest solar power developer. We rose from No.6 position in 2019 to No.1 in 2020 - injust nine months.
Simultaneously we formed game-changing partnerships in energy to startestablishing the base for global partnerships. Inducting TotalEnergies as a 20% partner inthe renewables business sealed a strategic alliance that covers investments in LNGterminals and renewable assets across India besides the gas utility business. Thepartnership within the renewables space in India will be a key contributor toTotalEnergies' objective of transforming into a clean energy leader.
Since January 2020 the value of our renewables business increased over 600times thereby yielding one of the best returns across all stock markets.
Thereafter in May 2021 we acquired Softbank's and Bharti's 5 Gigawattsportfolio of renewable assets allowing us to leapfrog and get to our target of 25Gigawatts a full four years ahead of our schedule.
This is what templatisation means to us and it gives us the confidence to expandswiftly across several adjacent sectors. This success is also a manifestation of the coreof our three organisational values - Courage Trust and Commitment
- that fundamentally define our Group.
Adani Foundation: Growth with Goodness
As a Group with businesses in locations where some of the poorest segments of ourpopulation reside we are deeply conscious of our responsibility to help marginalised andunderprivileged communities
- over and above just creating jobs. Through a wide variety of initiatives led by theAdani Foundation we have touched millions of lives across thousands of villages drivingbeneficial change in education health infrastructure development and sustainablelivelihood development. We expect to amplify our work and double these numbers over thenext five years.
However in line with the rest of the world the Adani Foundation's primary focus overthe past year was guided by the battle against COVID-19. One of the issues the cascadingnature of this pandemic thrust into the national spotlight was the grave inequality acrossour scattered communes in access to relief and care. As soon as the virus took hold wemapped out the urgencies of the moment and studied how best we could mitigate distressacross India. We quickly realised that the battle needed more than the standard assortmentof medical items like protective gear and diagnostic kits. The most pressing need was foradditional means to quickly deliver medical oxygen across the land.
The solution was tied to several items that were in short supply locally. We neededmore cryogenic tanks capable of transporting oxygen in supercooled liquid form moremedical oxygen cylinders for hospitalised patients more oxygen generator plants forhealthcare facilities unable to rely on transported supplies and more oxygen concentratorsfor people managing their infection by themselves.
It was a formidable challenge but one that we rose to quickly and efficiently. Workingwith our business partners and Indian missions across the world we managed to secure amassive life-saving inventory of these critical items the biggest of which we brought inwith the help of the Indian Air Force. Back home our indefatigable logistics teamsensured that the oxygen tanks and cylinders were repeatedly refilled and despatched to allcorners of the country.
I am also proud that the Foundation went well beyond procuring essential supplies. Injust days our engineering and medical teams expertly converted our Adani Vidya Mandirschool in Ahmedabad and the Noida Indoor Stadium into emergency COVID-19 Care Facilitieswith hundreds of beds oxygen support and catered food. In Bhuj and Mundra our hospitalsthat serve as a general medical oasis for the neighbouring districts were swiftly turnedinto 100% COVID-19 care hospitals.
At no time in the past was the work of the Adani Foundation more necessary and relevantthan it is now. I am deeply moved by the extent of the effort our Foundation's teammembers have put in often choosing to ignore the risk to their own health.
The Belief in the Long Term
Over the past few months there have been several voices that wonder if India's targetto be a five-trillion-dollar economy over the next four years is achievable. I personallysee it as an inconsequential question. History has amply demonstrated that out of everypandemic crisis emerge several learnings and I believe that India and the world becomewiser as we go through this pandemic. India will be a five-trillion-dollar economy andwill then go on to be a 15-trillion-dollar-plus economy over the next two decadesemerging as one of the largest global markets in terms of consumption size and marketcapitalisation. There will be bumps along the road as has been the case in the past andis expected to be the case in the future. However there cannot be any doubt that thelargest middle-class that will ever exist augmented by an increase in the working age andconsuming population share will have a positive impact on India's growth rates very muchin line with the demographic dividend India enjoys. The most essential factor requiredwill be a better trained workforce and I have no reason to believe that over the next twodecades we will not have been able to suitably address this challenge. It is a virtuouscycle that is driven by the growth in the middle-class population and India today has alonger runway than any other nation in the world.
Gautam S Adani