Mukesh Ambani’s rivals should be relieved, but not overly so. The petrochemicals czar recently informed shareholders that he will invest 750 billion rupees ($10 billion) in clean electricity and fuel over the next three years, describing it as his “most challenging” job. It doesn’t appear to be a large capital commitment from India’s most prominent industrialist, especially given that he recently raised $44 billion in financing during a pandemic and cleared his flagship Reliance Industries Ltd.’s $180 billion balance sheet of net debt.
However, it is still early days for India’s mostly coal-fuelled economy to make a significant shift in its energy mix. Ambani’s plans may easily become as aggressive as his 4G telecom endeavour, which was initially regarded as a me-too entry into a crowded sector of a dozen competitors by critics. In just five years, Ambani’s digital firm has amassed over 420 million users and bankrupted a number of other companies.
Total Energies SE of France, for example, has acquired a 20% share in Adani Green Energy Ltd. and has invested directly in some of the firm’s 25 gigawatt solar-energy portfolio, which has increased 50 times in three years. Gautam Adani, who surpassed Ambani as Asia’s second richest man earlier this year, aspires to become the world’s largest renewable energy producer by 2020.Reliance Industries claims it has the “potential to accelerate” another $200 billion in investment over the next ten years after spending $90 billion in the previous decade. Beyond sustainable energy, India’s largest business company has numerous irons in the fire, from a renewed focus on gas exploration to e-commerce via WhatsApp. It also has vast money and powerful allies in the form of Google and Facebook Inc.
The smaller group’s share prices have been shaky recently, following a stunning rise over the past year, amid concerns over the outsized involvement of some opaque foreign funds. That uncertainty has highlighted the critical role funding will play in Adani’s ambitious plans for India’s ports, airports, coal mining, power generation and transmission, gas supply, storage, and transportation. It’s also possible that the wealthy businessman is spreading himself too thin. In e-commerce, Reliance is soon be competing against Xiaomi Corp. with the JioPhone Next, which was custom-built by Google for the 300 million Indians who still use 2G handsets. Then there’s the adventure into the strange world of technology services: Ambani not only wants to be the first, but he also wants to be the best.
