Billionaire face-off on the cards

Having stayed off each other’s turf so far, two of the country’s largest business conglomerates, Reliance Industries Ltd (RIL) and Adani group, are finally headed for a likely face-off for market dominance.

In June, Mukesh Ambani-led RIL announced an aggressive multi-billion dollar foray into clean energy solutions, which places it directly in the way of Adani’s ambitions.

Adani group, led by billionaire Gautam Adani, has already identified renewable energy as a key focus area so that the portfolio includes a growing presence in solar power generation and solar panel manufacturing.

Meanwhile, on Sunday, in a regulatory filing, the Adani group announced its newest business entity, Adani Petrochemicals Ltd (APL), which will set up refineries, petrochemicals complexes and specialty chemicals units in Gujarat—directly challenging the biggest player in these segments, RIL.

Experts maintain that for Adani, it may take a considerable amount of time to reach RIL’s scale, but the foray into petrochem comes at an interesting juncture nonetheless.

“To create a world scale refining and petrochemicals complex will cost around 30,000-35,000 crore if we assume Adani would be setting up a 10 million tonnes per annum capacity plant. It may take Adani group, which is great at executing infrastructure projects, three-to-four years to set up these projects unless it acquires an existing asset and enters the segment immediately to reach scale faster,” said a senior analyst with a domestic brokerage.

To be sure, Ambani’s green energy plans may not be in direct conflict with those of Adani’s, as RIL’s Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, Gujarat, aims to create and offer a fully integrated, end-to-end renewable energy ecosystem. Indeed, analysts say, RIL could well become a raw material supplier to Adani for its renewable energy projects.

But petrochemicals could turn out to be a different story altogether.

India is the fastest-growing market for specialty chemicals — expected to grow to $40 billion by 2025 from $28 billion in 2018, according to McKinsey & Co.

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