Adani’s new Subsidiary to Compete Directly with Mukesh Ambani’s Reliance Industries

Indian billionaire Gautam Adani’s ports-to-energy conglomerate has recently set up a new subsidiary that will deal with petrochemical complexes, hydrogen plants, and refineries. Sources reveal that these businesses will directly compete with Mukesh Ambani’s Reliance Industries.

In the stock exchange filing, Adani Enterprises stated that it has subsumed Adani Petrochemicals Ltd as a wholly-owned subsidiary. This was done to “carry on the business of setting up refineries, petrochemicals complexes, specialty chemicals units, hydrogen, and related chemical plants and other such similar units”.

The conglomerate spans seaports to airports and deals with mining, natural gas, defense, infrastructure, electricity generation, and transmission. However, now it will venture into petrochemicals and other associated areas, which go head-to-head with Mukesh Ambani’s company.

Over the years, Reliance has established itself as the largest petrochemicals producer as well as one among the top 10 in the world. The company also owns and operates the largest oil refining complex in the world.

Ambani had recently announced a major ₹ 75,000 crore investment in establishing four “Giga factories”. These factories will make hydrogen fuel cells, and solar modules and will also build a battery guild meant to store electricity till 2024. The solar modules will apparently generate 100 gigawatts of solar energy by the year 2030.

Earlier this year, Adani had acquired his spot as Asia’s second-richest man. He had also announced his ambitious plan on becoming the largest renewable energy producer in the world by 2030.

Adani also has French giant,  TotalEnergies SE as a partner in Adani Green Energy Ltd. TotalEnergies has also invested directly in some of Adani Green’s projects of 25 gigawatts solar energy portfolio.

In January 2019, Adani Group had signed an “initial pact” with the German company BASF. As per the pact, BASF invested nearly 2 billion euros in a chemical factory at Mundra, Gujarat.

This pact was expanded in October 2019 when Abu Dhabi National Oil Company (ADNOC) of UAE and Borealis AG joined it.

Together, these four partners completed a “joint feasibility study” for a chemical complex in Mundra worth USD 4 billion.

According to a press statement given by BASF in November 2020, this was done to compensate for polypropylene production, an acrylics value chain complex, and a propane dehydrogenation plant.

However, this project came to a standstill due to the COVID-19 outbreak.

In April 2021, Adani Enterprises included Mundra Petrochem Ltd. (MPL) to “set up various feedstocks (coal, pet coke, coke, limestone, salts, sand, tar, oil, LPG, LNG, Ethane, LPG, green fuels, etc.) based refinery, petrochemical and chemical plants in a phased manner in India and to undertake all such activities associated with land acquisition, design and engineering, procurement… and other related undertakings”.

Whether MPL was subsumed as a follow-up of the pact with BASF and others remains unclear. It is also unclear if this new subsidiary will set up plants in other sites excluding Mundra.

In the past, Adani Group has included numerous subsidiaries since the beginning of the fiscal. While some dealt with power transmission and road construction, some dealt with wind turbine manufacturing.

In June, the company also ventured into the cement segment with Adani Cement.

Adani Group is one of India’s largest integrated infrastructure conglomerates. It has so far ventured in resources like coal mining and trading, rail, shipping, logistics, energy, agro, cold storage, food products, public transport, real estate, consumer finance, and so on. Thus far it has 6 entities listed.

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