Are Mukesh Ambani and Adani headed for battle?
Mukesh Ambani recently in Reliance Industries’ AGM stated that the company would be making a substantial investment of ₹75,000 crores($10 billion) in new energy business over the next three years. Adani meanwhile, has a strong foothold in the renewable energy business with Adani Green Energy. This news would have been a huge relief for Ambani’s competitors in the petrochemicals business. However, this does not spell good news for France’s TotalEnergies SE, which has picked up a 20% stake in Adani Green Energy Ltd.
Mukesh Ambani’s game plan
$10 billion is hardly a substantial amount for India’s most influential businessman, considering he had raised $44 billion during the pandemic. With the raising of such a huge amount he had effectively made Reliance Industries Limited free of debt. This may be most daunting task the 64 year old billionaire has taken up yet. The investment though small signifies a shift in the energy mix of India, which has been highly reliant on coal till date. It could just be a matter of time before Ambani’s goes aggressive on clean energy in a manner similar to how he did with Jio.
Jio was initially dismissed as me-too entry in the telecom sector. However, within 5 years Jio has transformed itself into a behemoth and has driven several competitors to bankruptcy. Jio has now diversified and is also planning to launch an affordable smartphone in partnership with Google.
The Adani stance
Adani is anxious to grow and expand his business beyond the successful ports business. Adani has had a roller-coster ride lately. He recently gained the position of second richest Asian, only to then gain the undesirable title of the man who lost the most money in a week, after having lost more than $12 billion.
Until now, both the billionaires had operated in sectors completely unrelated to each other. Adani would be rattled by the entry of his statesman into the clean energy business. Would Adani fold under the pressure, or will he fight back and emerge stronger?
Is Mukesh Ambani biting off more than he can chew?
It is entirely possible that Mukesh Ambani may have bit off more than he can chew. On one front he is in war with Amazon and Walmart. On the other front he is challenging Huawei with the upcoming smartphone project. The billionaire would be keen to avoid a succession war similar to what he had with his brother. Hence he may be trying to build another successful stand alone entity. But has he picked one battle too many?