Adani Ports and SEZ should be the Adani Group's crown jewel. As the company's dominant port operator, not only is it a leader in its space but a cash cow to boot. Indeed, in 2021, it had the highest consolidated profit—$650 million—of all the Adani Group companies. As a fund manager in today's story points out: “For an investor, there has to be a business first, then profitability, then valuation, and then comes liquidity.” Adani Ports, they add, is the only Adani company to have crossed the first three barriers. Adani Ports, however, isn't the group's most valuable company. It doesn't even make the top three. Instead, Adani Green Energy takes gold, Adani Transmission takes silver, and Adani Total Gas gets the bronze. All three are also among India's 20 most valuable publicly traded companies—entering the rarefied club just within the last year,
we noted that that several of them shared common foreign portfolio investors (FPIs). In what’s ostensibly a response to this criticism, only one FPI owns more than 1% of Adani Green now, compared to 10 in December 2020. However, the total number of FPIs holding stake in the Adani stocks has gone up. More importantly, the criticism that no major domestic institutional investor had a meaningful stake in its stocks has also been tempered somewhat after the IPO-bound Life Insurance Corporation upped its stakes in multiple Adani Group companies. And given the gravity-defying rally that these stocks have been on over the past year, LIC’s additional purchases would have been very costly indeed. As Seetha and Anand point out in today's story, the skyrocketing fortunes of many Adani companies owe as much (or more) to curious shareholding patterns and perceptions of government patronage as they do to the businesses themselves. Gautam Adani certainly isn't complaining—it has made him the world's sixth richest man. But is this ascent sustainable?