Gautam Adani’s $213 bn succession plan puts group stocks in limelight

Shares of Adani group companies were in focus on August 4 after Gautam Adani in a recent media interview unveiled the $213 billion succession plan. Adani’s dominance in key sectors of India’s economy makes the succession a highly anticipated decision.

Given the legal and reputational risks, this leadership transition holds heightened importance for investors. With a market capitalisation of $213 billion across 10 listed units, the Adani Group commands significant infrastructure critical to India’s growth.

As the largest coal importer, top solar farm owner, and second-largest cement producer, Adani dominates. Its ports handle nearly half of the nation's shipping containers, and its airports serve over 90 million passengers annually.

In an interview with Bloomberg, Adani Group Chairman Gautam Adani revealed that he plans to step down and shift control to his scions sometime in the future.

"Succession is very, very important for the business sustainability. I left the choice to the second generation as the transition must be organic, gradual and very systematic," he said.

Follow our market blog to catch all the live action

At present, his sons Karan (37) and Jeet (26) along with his nephews Pranav (45) and Sagar (30) hold several key positions in the conglomerate.

While Karan oversees businesses including cement, ports and logistics, and is also in charge of human resources, Jeet oversees India’s biggest network of privately operated airports, as well as the group’s defense arm and digital businesses.

Gautam Adani's brother Rajesh Adani’s sons are also key to the group’s operations. Pranav oversees most of the group’s consumer businesses, including consumer goods, gas distribution, media and real estate.

Meanwhile, Sagar oversees the group’s energy business, as well as finance. He is also working to improve the limited analyst coverage for the conglomerate's firms, highly unusual for such large businesses.

Talking about the succession discussion with the scions, Adani told Bloomberg that he asked the four younger men whether they want to carve up the Adani Group’s businesses between themselves and part ways. He gave them three months to decide.

When they came back to the billionaire, they told him they wanted to run the conglomerate together as a family, even after the founder’s departure.

This has triggered a series of largely unnoticed changes, including the establishment of a four-way leadership structure that divides management but mandates collaboration among the heirs.

The Adani children stated in separate interviews that joint decision-making will persist, even during crises or major strategic decisions, when Gautam Adani steps back.

The handover will face challenges from ongoing concerns post-Hindenburg, perceptions of key-man risk surrounding Gautam Adani, the complexities of entities and trusts holding the family's company shares, and the intricacies of the succession plan itself, noted Bloomberg.

Also Read | Gautam Adani plans to step down at 70, hand over control to sons in early 2030s

Adani group stocks including Adani Enterprises, Adani Ports, Adani Green Energy, Adani Power, Adani Total Gas, Adani Energy Solutions, Ambuja Cements, ACC, NDTV and Adani Wilmar were trading up to 4 percent lower.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.