Adani group hits 100 billion market cap, a first for a first generation Indian company: Gautam Adani

Mr. Gautam Adani, Chairman, Adani Group, AGM 2021 Address

Dear Shareholders,

Much as I would have liked to have welcomed you all in person, the current safety measures appear to have made these virtual meetings the new normal. However, I am optimistic that our AGM of 2022 will be an in-person meeting and I will have the opportunity to actually shake some of your hands.

Today, I wish to share with all of you some reflections on the past twelve months — a period that has been extraordinarily difficult because of a rampaging pandemic that will leave its mark on the world for several decades to come. The statistics sadly are staggering. With close to 19 crore cases reported worldwide, the COVID-19 pandemic is already the most widespread threat to global health in recorded history. It is also one of the deadliest. In its lethal march across the earth, the virus has already killed over 40 lakh people. No continent, no country and no community has been spared.

We must admit that every life lost is a tragedy. Undoubtedly, our country should have done much better, especially during the deadly Wave Two. However, as the nations of the world marshal their resources to fight the pandemic, I see India being targeted by several critics for not doing more to protect its citizens, especially in vaccination.

We must recognize that, given the sheer size of our population and densely packed metros the challenge before India is far greater compared to most other nations. To put this perspective in numbers. India has more people than the combined  population  of all the countries on three continents Europe, North America, and Oceania. In other words, our vaccination effort has to be bigger than the combined efforts of 87 countries. The fact is that, of the 320 crore vaccine doses given worldwide, 35 crore doses were given in India. While I admit that criticism is justifiable, we must not fall prey to voices that demoralize our nation or break the morale of frontline workers who have made extraordinary sacrifices.

And it is these frontline workers that have been our inspiration.

Assisting the nation during a crisis is not about quantifying in numbers what corporates like us do. Instead, it is about stepping up to make sure we do our part, it is about extending a hand to help every individual we can reach, and it is about putting the nation first in everything we do. And no one has inspired us more or reminded us better about our duty to serve the nation than the front line workers  who all through the pain of the pandemic, exemplified the noble Indian ideal of Seva Parmo Dharma — which translated means ‘The primary duty is to provide service to mankind’

 Yes, the Adani Group reached out all across the world to find critical essentials like liquid medical oxygen, cryogenic tanks and oxygen cylinders but our contribution stands humbled by the immensity of the effort put in by our women and men of the Indian Air Force, who flew countless missions day and night to places near and far to help us bring in the essential supplies.

Yes, we boosted the PM Cares Fund with our contributions, but money can never match the individual selflessness of the people on the street who rose above their own needs to help fellow Indians they never knew and will never meet again.

Yes, we provided logistical support all over the nation by air, by sea, by rail and by road—  and moved thousands of tonnes of desperately-needed supplies but that is nothing when compared to the immeasurably noble work of our doctors and nurses as they put their lives on the line to serve their fellow citizens.

 The individual stories of humanity have been moving—  the sacrifices  we have witnessed have been humbling — and through all of this, we have done our best to support oxygen distribution and in-patient care as the people from our Adani Foundation brought together resources and experts to help.

For example, in just days, our engineering and medical teams converted the Adani Vidya Mandir school in Ahmedabad into an emergency care facility — with hundreds of beds, oxygen support and catered food. It was literally ‘vidya-daan se jeevan -daan’, as our school’s halls of learning became halls of life. Likewise, our general hospitals in Bhuj and Mundra were remade into 100% COVID-care hospitals.

None of this would have been possible without the coordinated efforts of thousands of my fellow Adanians, who ignored the risk to their own health to help drive this mission. One standout example of this is the length to which our logistics division went to deliver cold-stored vaccines to all parts of India from east to west and north to south. As an interesting statistic the distance they covered is the equivalent of travelling twice around the world. I thank them all and I also want to tell them that I am very proud of what they have done and are still doing.

I therefore stand humbled before the nurses, doctors, paramedics, ambulance drivers, police forces, sanitation workers, delivery persons, transport workers and my own fellow Adanians who went above their call of duty to ensure that life remained as normal as it could be in these difficult times.

Dear Shareholders,

Let me now talk about our performance as a Company. As turbulent as it was in global health, the past year was an extraordinarily strong period for businesses that innovated their way through these unprecedented conditions. Those that opened their sails and rode the winds – came out stronger and I am proud that even in the disruptive fog of the pandemic, our six listed entities stood out as beacons of market leadership, adaptive management and institutional profitability.

The performance of our listed entities propelled our portfolio to cross 100 billion dollars in market capitalization in the very first week of this new financial year. This valuation milestone is a first for a first-generation Indian company. While there is reason to feel proud, valuations are simply an outcome — what truly matters to me is the path that led us here and even more importantly, the path we have charted ahead. I credit our performance and resilience to the core values that we believe in. These values drive our purpose of Nation Building and this past year further reinforced my faith in our organizational values. Not only have they seen us safely navigate a great many challenges, they have also given us the toughness to emerge stronger in the face of hurdles.

What we built yesterday has allowed  us to secure our today—   and  what we are building today is the foundation for a better tomorrow. Anchoring all of this are our three primary values Courage, Trust and Commitment. Our growth journey is just starting, and this is manifested in the performance of all six of our listed entities that produced results significantly above the market indexes.

For the Financial Year 2021, the consolidated EBITDA (or Earnings Before Interest, Taxes, Depreciation and Amortization) for our listed portfolio was over 32,000 crore rupees, registering a year-on-year growth of 22 percent. All Adani stocks generated returns over 100 percent and our businesses ensured that we returned close to 9,500 crore rupees to you, our equity shareholders. This is a 166% increase in Profit After Tax on a year-on-year basis.

Here, I must draw attention to our philosophy of how we look at our investments. We are inter-generational holders of equity. We focus on creating long term sustainable value for our partners, our minority investors and ourselves. 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 diversion will not impact us. We have always been a confident organisation that has taken on challenges that very few would dare or imagine. Every challenge thrown at us only makes us stronger and better prepared.

I would like to highlight a couple of Group milestones we achieved in the last year.

Adani Ports and Special Economic Zone continued to transform itself from a Ports Company into an integrated Ports and Logistics Company. The Financial Year 2021 was a truly transformational year and 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.

Adani Green Energy is redefining the very future of renewable energy. In 2020, we became the largest solar company in the world — a journey we started just in 2015. And last month, following the acquisition of SB Energy’s five-gigawatt portfolio, at an enterprise valuation of about 3.5 billion dollars, 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, we made our move into airports and 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.

Overall, as an incubator of businesses, Adani Enterprises remains unrivalled and continues to operate as one of the world’s largest proving grounds for new ideas and business models.

 Dear Shareholders,

While we have every reason to be satisfied with our business performance, I believe that our real phase of accelerated growth is just beginning. This is because our Group benefits greatly from having a portfolio of companies with several strategic adjacencies that will fuel our future growth in a diverse range of sectors.

Whatever businesses we are now 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. This very distinctive ‘Adani model’ that combines the power of adjacencies with the bridging capability of B2 B2C helps us build a platform that puts us on the path to infinite possibilities, especially when backed by the tailwind of an economic powerhouse like India. I know of no other such growth model that offers unprecedented and ever- increasing access to an unlimited B2B and B2C market for the next several decades.

Dear Shareholders,

If there was a year that the work of the Adani Foundation was critical, it was this past year. The Foundation led several COVID-related healthcare initiatives without pausing any of its regular activities. I would like to thank my wife Priti who quietly and selflessly continues to put her heart and soul into the ever-expanding work of the Adani Foundation. She stays invisible, but I know better than anyone else what her contributions have been — especially in this critical year. She is my conscience as we do our part to drive Growth with Goodness.

While the Adani Foundation has several ongoing initiatives, I have two favorites. I am proud of the tremendous impact achieved by the SuPoshan project, a Foundation initiative that has raised and trained an army of women to guard children’s health. SuPoshan has succeeded  in pulling 33,000 children out of malnourishment – an achievement that goes to the very heart of the meaning of nation-building.

Another project that I am particularly proud of is our sports champions incubation programme. Under our Garv Hai initiative, seven of the ten athletes we are supporting have qualified for the upcoming Tokyo Olympics – Amit Panghal, Rani Rampal, Deepak Punia, KT Irfan, Ravi Kumar, Ankita Raina, and Shivpal Singh are all youngsters the Adani Foundation has sponsored over the past years and will represent our nation in Boxing, Hockey, Wrestling, Tennis and Athletics. In addition, ten junior athletes are being trained for future global events under the long-term sports incubation program. The majority of them come from humble backgrounds and each of their stories is heart warming. Their winning medals is less important for me – what matters is the inspiration their stories drive within me.

Dear Shareholders,

Let me conclude by talking about my belief in the long term. Of late, there have been several voices that wonder if India’s target to be a five-trillion-dollar economy over the next four years is achievable. 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. India will be a 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. 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. I have no reason to believe that over the next two decades we will not have been able to suitably address the challenges ahead of us.

India is at the start of a virtuous cycle that is driven by the growth in the middle-class population — and our nation today has the longest runway of any country in the world. Jai Hind!