🥊 Ambani v/s Adani: Who Will Win?

Ambani and Adani have regularly been in the news, each beating the other for the title of Asia's richest man. But who will ultimately stand victorious? (Reading Time: 3 mins)

Two Gujaratis currently have a stronghold over the nation.

No, we're not talking about PM Modi and Home Minister Shah.

We're talking about businessmen Mukesh Ambani and Gautam Adani.

Ambani is currently the richest man in Asia, and Adani the second richest.

But by the time this article reaches you, this may change.

Yes, the two have been fighting it out for the top spot and for years this was the only rivalry between the two businessmen.

But now things are changing.

Ambani v/s Adani

So far these two enterprising businessmen had stayed out of each other's way.

While Ambani focused on crude oil, Adani focused on edible oil.

Ambani is focused on setting up retail stores, while Adani is setting up warehouses.

The only field where the two clashed was the power industry. Both billionaires were interested in coal.

While Ambani runs the world's largest coal-mining operation, Adani (who also mines coal) is the largest trader of imported thermal coal. 

However, things began changing on 24 June 2021.

In Reliance's Annual General Meeting, Ambani announced he would invest Rs. 75,000 crores in green energy over the next three years.

The problem: Adani has a monopoly over India's green energy business.

Moreover, both companies are focused on solar energy.

Thus began a game of entrepreneurial chess between the two billionaires.

Currently, Adani Green is the world's top solar power generator, and even exceeds the solar power capacity of the US.

But experts believe Reliance, with its numerous acquisitions and tendency to lower prices, could soon rule India's green energy business.

Whether that happens or not, its entry will create a duopoly, which will be good for customers.

It could bring down India's solar tariffs, which are already the lowest in the world, down further to Re.1/kwh by 2030.

Adani won’t go unscathed.

So, he decided to retaliate by entering one of Reliance's strongholds: the petrochemical business.

Now, many thought this move was not a good one. It wouldn't achieve much as the petrochemicals business is soon to become a dying breed.

Plus, nothing much had come out of the petrochemical plant Adani had set up in Gujarat in 2019.

Nonetheless, Adani Petrochemicals was born in 2021.

And the real repercussions of that move could be seen this year.

The Twist in the Tale

You see, Adani is aiming to do something that Ambani failed to do.

Strike a deal with Saudi Aramco, the world's largest exporter of oil.

Reliance had agreed to a deal with the company in 2019. 

As part of the deal, Saudi Aramco would buy a 20% stake in RIL's oil-to-chemicals business worth $15 billion (You can read about the deal in detail here).

But with Reliance's new focus on green energy, the deal was called off.

And now Adani could benefit from it.

Aramco has been keen on investing in an Indian company, especially one with a crude oil refinery for quite some time now. Why?

Partnering with an Indian firm could help the largest crude exporter also become the largest crude refiner.

In 2018, it tried to partner with state-owned Indian firms to set up a refinery worth $44 billion. But that deal fizzled out due to political opposition.

Now, with Adani pivoting into the petrochemicals, Aramco may have finally found a refinery partner.

This could boost Adani's budding petrochemicals business as well.

However, the deal is still in speculation. It could very well not involve the petrochemicals business but rather Adani's green energy business. 

What does an oil exporter have to do with green energy?

Well, many oil companies have realised that the future of oil is limited. So, they're trying to invest in green energy to remain relevant.

Some are also doing so to offset their carbon emissions and gain that badge of having net zero emissions.

Aramco's deal with Adani could be something similar.

The chess match has just gotten more interesting.

However, while watching this rivalry play out may be entertaining, it is not good for us in the long run to just have two strong players.

Look at what Jio did for the telecom world. It promised dirt cheap prices, removed competition, created a duopoly, and raised prices again.

Something similar may happen in the green energy world. This will directly impact the shift to green energy, which is urgently needed.

The government needs to step in, support other companies and startups working in the space and ensure we have healthy competition.

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