Bloomberg Audio Studios, podcasts, radio news. In twenty eighteen, Asia's second richest man, Galto Madonni, invited his brother's, sons and nephews to his home for a meal.
All seven of them were sitting around the dining table having lunch and very unexpectedly.
Galto Madonni pop the question how do you see the future?
Do you guys want to carve up the business between you or do you want to run the NDAI business assist single family.
The business Galtam was asking them about is the Adanni Group, a sprawling conglomate which started with the company set up by Galtham and his brothers back in nineteen eighty eight. Today, the Adnni Group is worth more than two hundred and ten billion US dollars and touches almost every facet of daily life in India.
When you switch on the electric bulb at the home, his business is touching your life. When you are buying groceries from the shop, his business is touching your life. When you are looking to buy a house, his business is touching your life.
Anto Anthony is an editor at Bloomberg News based in Mumbai covering South Asia and he says, for years Galtum has been essentially the super CEO of the Adanni Group, making all the decisions for the entire conglomerate. But now he was asking the family members before him, his only two sons and two nephews, how they want to run the company when he the patriarch, steps down. The question surprised the younger Adanni's.
Because Gadomadani was still in his fifties. None of them thought that he's thinking about succession or transition.
He gave them three months to work it out, and when they came back, it was a united front.
They said that we have seen my father and his brothers working together to build up this legacy, and we always work grow together, so there was no doubt in their mind that they should stay together.
It's a bold move for a wide ranging group whose units span everything from airports to solar farms, and this succession is poised to be one of the world's largest and most challenging transfers of wealth. Bloomberg sat down with Galtam and his four airs for a series of exclusive interviews about what this transfer will look like.
Succession is a very, very important for the business sustainability, and it must be is the organic, gradual and a very systematic.
Welcome to The Big Take Asia from Bloomberg News.
I'm one half.
Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever shifting region. Today on the show, Bloomberg's exclusive interviews with the Adonis, how the family envisions an a Donni group without their patriarch at the helm, and what's at stake for India's economy. Galta Madonni's first big break came when he decided to help his brother
with his plastics factory. That's when he got into global trading by importing polyvinyl chloride or PVC for his brother's business, and it led him to set up his flagship company, what would become a Donni Enterprises in nineteen eighty eight.
That's where he got his first real break. From there, he started exploring projects in ports sector. He set up Mundra Port, which is as of now one of the largest ports in India. After that, we are seeing a meteoric growth which really gathered pace after twenty ten. Many people say that it is very closely associated to Prime Minister Narendra Modi's ascent.
Adanni's businesses have often been closely aligned with Prime Minister Narandro Modi's priorities, and the Adani Group has stepped in where the nation lacked resources like an infrastructure and green energy.
India is a country of one point four billion people, but it really lacks infrastructure, whether it is roads, ports, airports. Power. Energy is a huge issue out here. There are so many millions of household which doesn't have access to electricity. So that's how when Gaudamadhani decides to step in and help build this infrastructure, his priorities and business interest got aligned well with that of the federal or state governments
in India. So as he himself puts it, when you align your interest with the governments, it always gives you tailwinds rather than headwinds, and it has really propelled his business forwards and along with it his wealth.
The Adani Group is India's biggest importer of coal, it's the largest owner of solar farms, and Adani owned ports carry almost half the country's shipping containers, while more than ninety million people use their airports each year and for years, the Adanni group appeared to flourish with infrastructure projects like these. Galtam is currently Asia's second richest man and one of the most influential business leaders.
In the world.
He's worth more than one hundred billion US dollars. But last year something happened that put the Adanni Group's success at risk.
So just to give the high level understanding of who Hindenburg Research is.
In a daring short selling attack, a New York based group called Hindenburg Research accused the Adanni Group of the largest khan in corporate history.
It did disclose a short position in a DNI group and what it's saying basically is the conglomerate engaged in market manipulation and then accounting fraud as well. Now Gotamadani has denied this and he says that the report is baseless.
Hindenberg alleged that the Adani Group had used a web of companies in tax evans to inflate its revenue and manipulate stock prices. Critics have raised similar questions about the conglomerate for years. The group denied all claims and noted to Bloomberg that they provided a very long and comprehensive response in just seventy two hours on every single point, But the crisis came at a very tense moment for the Adni Group.
This came at a time when the group was looking at one of the biggest share sales in its history. That share sale had to be pulled. The group lost a lot in marketcap.
How much market cap did they lose.
One hundred and fifty billion dollars in a few months?
Wow? Huge.
It took them six months to eight year to asswitch all these concerns and regain that market cap.
The Adanni Group has also faced regulatory probes at home and in the US, where prosecutors were investigating whether an ADNNI entity, executives linked to the company, or billionaire founder Galtum himself had paid bribes to Indian officials in return for favorable treatment on a green energy project. The Adanni Group said none of its units has been notified of the probe and that it's not aware of its chairman
being part of the investigation. No Adannie unit has been charged with wrongdoing by the US Justice Department, and investigations don't always lead to prosecutions, but the controversies swirling around the conglomerate have prompted some changes there.
What are they doing differently after Hindenburg.
So they're cutting down on leverage in a big way. They're putting a load of risk mitigation measures in place. They're more measured in their approach towards growth and abold, They're communicating more.
And now Anto says he's seen a huge change in how the company is trying to be more transparent about their operations.
Till the Hiddenburg report hit, many considered it as an opaque group. Many knew nothing about the group or its inner workings, the kind of processes they have and so on. Now they are very aggressive about communicating, whether it's to the investors or media.
And this newfound openness of the Adanni family to the media may have also helped Bloomberg get rare access to the tycoon and his family. Anto and a TV crew spent nearly a dozen days following leaders of the Adanni Group, and while Gothamdani declined to address controversies swirling around his conglomerate, he did agree to talk about the family conversations around succession.
Succession is not en one of the event, but it is a long drawn journey and my plan of succession started almost decade.
Ago after the break what the Adani family plans might mean for India and the rest of the world. Bloomberg's Anto Antony was given unprecedented access to the Dani family.
He and a.
TV crew spent nearly two weeks in India visiting the headquarters and meeting employees right.
From the janitor right up to group CEOs.
And taking field trips to visit their sites.
We went to a place called Karvda in Gujarat, which is a very arid region, it said does, said Ball. So what they're trying to do is they're trying to cover up the area five times the size of Paris with solar panels and win turbines.
One thing Anta wanted to talk with Galta Madani about was why he was planning for succession now when he's still very much engaged in the business. Galton told him he and his brothers want to be around to help the next generation.
So what Gaudamadani and his two brothers who are involved in the business is trying to do is transition it into the next generation at a time when they are still around to oversee and correct them when needed. This is a conglomerate which runs from selling apples to running airports. It's a complex set of businesses spread across various sectors. So the complexity of this transition is probably the reason why he's thinking of it right now.
And when is he planning to hand over the reins.
He's sisty to right now. When he's seventy is when the transition happens. That's when he will retire. Goadabadani is looking at handing over his empire to four successors.
These four successors Gautam's sons, Goten and Jeet and their cousins Pranav and Sagar. Pranav is the eldest among the four and he's been in the business for the longest. He now oversees most of the Udani Group's consumer businesses, including consumer goods, media, and real estate. He's also responsible for redeveloping the Darav slum, one of Asia's largest and the size of Monaco. It involves relocating a million people at the heart of Mumbai who call the slum their home.
Bloomberg followed Pranav on a visit to the area.
We saw many of the residents walking up to him. One of the key concerns which they had was will we get a home right here? They walked up to Pranav they shared this concern and when they raised these questions with him, he's a smooth talker with an easy smile and cool demander, so he will pat them on their back, hold their hands.
Sounds like he's also very much of a politician too.
If I were to pick one among the four who will be able to talk to the people who are staying in the slum and top executives or dignitaries in the same manner, that would be prun of.
Next we have Kara Nadani, Gautam Madani's eldest son. Anto says he's a huge Formula one fan.
If you walk into his sophie, you will see a lot of replicares of Ferrari cars, scale models of Farari cars all over the place.
And he manages all the ports for the Adani Group.
He's a no nonsense, driven, passionate guy when it comes to business.
Then we have jet Adani, Galatam's youngest son. He's the family's only trained engineer and looks after the group's airports. He's also in charge of the digital businesses as well as the defense unit, which makes equipment ranging from small arms to missiles.
He's the one who has got most of the mannerisms of Gaudamdani, Like he's a very affable guy. But I saw that when an executive tell him that something is not doable, he just lost his school and raised his voice. So I asked him why, and he said that it's because his pet peew is that somebody telling him that something is not doable without trying it out and giving the rational after trying it out.
Then we have Saga Adani, the youngest nephew, got them. He oversees the group's energy business as well as finance.
He's the face to the investors, like he's mostly traveling, like two toy day's a month, he's traveling.
And how this succession plan will come together? Well, the businesses have been split between the four younger Adannis, with each heading their own units, but when it comes to the decisions that affect the entire group, the four have agreed to make the call together. And so how is this going to work in reality? Because you've essentially got four I mean, who calls a shot if there's a disagreement.
So they're very clear that there is not going to be a first among the equals. All four will have equals, say in management. So now if you are to take a major strategy decision, then all four has to be on board. It is going to be a joint decision making.
That sounds too good to be true.
That is what everybody is telling me. Most of the succession experts I talked to made that point. Some of them even said that you have to work against basic instincts of human beings to make this work, because at some point meritocracy will come up, some people will be more committed to the businesses and will build their businesses up in a better way.
And so did Press Prana the eldest Air on how realistic this new joint management structure actually is.
Transition plans at various large conglomerates had failed due to internal officials within the next generation. What plans the group is putting in place to make sure that that doesn't happen.
I don't know if you're aware, but we as a family, we have lunch every day together. Chairman, my uncle, my father when he is there, and the whole second generation, we all actually have lunch together. We discuss issues, so
there's a lot of communication happening. Having said that, everyone is of course looking at different businesses, and though we are looking at different businesses, we are like one team when it comes to discussions like talent management, how we look at the future of the company.
And when it comes to Galtam's personal fortunes some one hundred billion dollars of it, Anto sources told them it would also be split equally among the four.
All this is held through a trust, the family Trust, and areas down the line, when god Madani turns seventy, each of the second generation will become an equal beneficiary of that trust. If we were doing it today, each of them could have got about twenty five billion dollars. But then we have to keep in mind the meteoric rise in wealth of the group. So seven years down the line, it is anybody's guess what they will be inherited.
Center billionaires for sure, and Anto says this humongous wealth transfer and leadership transition doesn't just concern this single family. There's far reaching ramifications for India's three point five trillion dollar economy and its future development. One reason for that is that the Idani group has played such a key role in helping India shore up its infrastructure.
There's a lot of deficiencies in the infrastructure, so Adani is somebody who has come up and has been trying to plug that gap. We haven't seen anybody trying to do with at this scale ever in independent India's history. So his success is very important because if he succeeds, then India will be able to grow at a faster pace.
And India growing at a faster pace and living up to his potential is quite important for the global economy also because as the powerhouses like China to Germany are facing its own issues and brokerage Houses has been pointing out that India is among the countries which has to contribute most to pull up the slack. So not only for India, but even for the global economy, it is quite important that this succession plan succeeds.
And what about galtem If this all goes well.
Once a transition is complete and once you have more time at hand, what would be your plans?
Oh, ultimately we will retire more relax.
This is the big take Asia from Bloomberg News.
I'm wanha.
This episode was produced by Young Young Naomi m Jessica Beck, and Alex Sugia, who also mixed it. It was fact checked by Naomi and edited by Caitlin Kenny and Alyssa McDonald. Our senior producers are name Is Shaven and Kim Gettlson. Our senior editor is Elizabeth Ponso. Nicole Beemster Bower is our executive producer, and Sage Bowman is Blomberg's head of podcasts. Please follow and review The Big Take Asia wherever you listen to podcasts. It helps new listeners find the show.
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