Billionaires Ambani, Adani start to face off
In June, Indian billionaire Mukesh Ambani and his aides ran into an unexpected dilemma when debating where to train the dealmaking lens of his empire next.
Ambani’s Reliance Industries Ltd. was contemplating buying a foreign telecommunications giant, when word reached them that Gautam Adani -- who had overtaken Ambani as Asia’s richest man a few months earlier -- was planning to bid in the first big sale of 5G airwaves in India, according to people familiar with the matter.
Ambani’s Reliance Jio Infocomm Ltd. is the top player in India’s mobile market, while the Adani Group doesn’t even have a license to offer wireless telecommunications services. But the very idea that he might be circling ground so core to Ambani’s ambitions put the tycoon’s camp on high alert, according to the people, who asked not to be named discussing information that isn’t public.
One set of aides advised Ambani to pursue the overseas target and diversify beyond the Indian market, while another counseled conserving funds to fend off any challenge on the home turf, according to people familiar with the discussions.
Ambani, worth almost $90 billion, ultimately never bid for the foreign firm, partly, the people said, because he decided it would be more astute to retain financial firepower in case of a challenge from Adani, who has seen the world’s largest wealth gain this year -- to $118.3 billion, based on data from the Bloomberg Billionaires Index.
After peacefully expanding in their respective domains for over two decades, Asia’s two richest men are increasingly treading the same ground, as Adani in particular sets his sights beyond his traditional areas of focus. That’s setting the stage for a clash with widening implications both beyond India’s borders, as well as at home as the $3.2 trillion economy embraces the digital era, triggering a race for riches beyond the commodity-led sectors where Ambani and Adani made their first fortunes.
The opportunities emerging -- from e-commerce, to data streaming and storage -- are reminiscent of the US’s 19th century economic boom, which fueled the rise of billionaire dynasties like the Carnegies, Vanderbilts and Rockefellers.
The two Indian families are similarly hungry for growth and that means they’re inevitably going to run into each other, said Arun Kejriwal, founder
Mumbai investment advisory firm KRIS, who has been tracking the Indian market and the two billionaires for two decades.
“Ambanis and Adanis will cooperate, co-exist and compete,” he said. “And finally, the fittest will thrive.”
Representatives from Adani’s and Ambani’s companies declined to comment for this story.
In a public statement on July 9, the Adani Group said that it has no intention of entering the consumer mobile space currently dominated by Ambani, and will only use any airwaves purchased at the government auction to create “private network solutions,” and for enhancing cybersecurity at its airports and ports.
Despite such commentary, speculation is rife that he might eventually venture into offering wireless services for consumers.
“I don’t underestimate a calculated entry by Adani into the consumer mobile space later to compete with Reliance Jio, if not now,” said Sankaran Manikutty, a former professor at the Indian Institute of Management in Ahmedabad, who remains a visiting faculty member there and has worked extensively on family businesses, telecommunications and strategy in emerging economies.
For decades, Adani’s business were focused on sectors like ports, coal mining and shipping, areas that Ambani stayed clear of amid its own heavy investments in oil.
But over the past year, that’s changed dramatically.