Name Roll No.

Gauri Joijode 01-37-024

Amit Panchal 01-37-044
Darshan Panchal 01-37-045
Chinmay Patel 01-37-047
Chirag Shah 01-37-051
Karuna Sharma 01-37-057
GROUP 1: BUSINESS POLICY

Adani Group
1. Diversification strategy adopted by the chosen group of companies
a. Provide details of the first major business started by them with the business scope
Ans: Adani group started their business primarily as a commodity trading firm under the
name Adani Exports Ltd. They grew rapidly and started export and import of multibasket
commodities. Adani Enterprises Ltd was incorporated in the year 1993 with the name Adani
Exports Ltd. The company started as a partnership firm in 1988 and attained joint stock status
in 1993. To provide a base for trading operations, the company started construction of
Mundra port in 1995.
In 1997, Adani Exports Ltd, incorporated Adani Eastern Generation Company Ltd (AEGCL),
a 50:50 joint venture company with the UK power maintenance giant - Eastern Generation.
Subsequently the company began coal trading in 1999. In 2000 the company forayed into the
edible oil business by entering into a joint venture with Wilmar forming Adani Wilmar.
Hence the business scope of Adani was around resources, logistics and Energy. Resources
include trading commodities and mines. Logistics were improved through building large
network of ports, SEZs as well as railway networks both in India and outside the country.
Energy involved primarily power generation and transmission.

b. Key diversifications with the rationale of diversification (vertical

integration, horizontal expansion)

Ports: With increased import export operations, the group was facing infrastructure
problems, hence they ventured into private port development.
SEZ: Adani group also undertook related diversification in SEZ by developing integrated
SEZ in Mundra to utilize the port to its full capacity.
Edible Oil: One of the main reasons for diversifying into this segment was to leverage their
existing distribution network to give them a competitive advantage.
Power Generation: The major commodity imported by Adani Exports Ltd. Was coal
through Mundra port. The group used this to exploit the growth potential in power sector.
Financial Services: Adani Capital the NBFC arm of the group began operations in 2017
primarily to provide capital for rural development and medium and small enterprises. Along
with this housing finance arm of Adani started in 2017 to provide affordable finance for
customers.
Real Estate: Adani diversified into real estate due to the growth opportunities the sector
presented.
Defence: Adani entered into the defence and aerospace sector due to the huge potential it
offers as India’s defence needs are large and expanding, and it is counted as one of the
biggest spenders in the defence and aerospace sector in the world.

c. What synergies do you expect with each of the diversifications in (b) above

 The Adani Ports and SEZ vertically integrated the supply chain and logistics activities
which provided them with a competitive advantage.
 Adani already has access to coal through their port operations. The major synergy by
diversifying into power generation would be ready and reliable availability of raw
material i.e. coal.
 Edible oil: The joint venture with Wilmar into edible oil potentially provided synergies by
leveraging the logistical and supply chain capabilities of Adani group.
 Adani’s foray into financial services and real estate was to potentially leverage the growth
component of both the sectors. The potential synergy with existing businesses would be
the resources in terms of expertise in operations and management.
 Diversifying into defence, the Adani Group is cashing in on the fact that its SEZ and port
would prove to be a unique advantage for defence manufacturing, as large-scale and high-
end transportation and production can occur at the same place.

d. Did the group choose organic or inorganic ways for each of the above diversifications?

Organic growth
1. Ports and SEZ
2. Power generation
3. Logistics and Infrastructure development
Inorganic Growth:
1. Joint venture with Wilmar in the Edible oil business
2. Adani capital’s acquisition of Essel Finance MSME loan business
3. Adani group in the power sector also had inorganic growth by various acquisitions the
major one being Reliance Infrastructure’s Mumbai energy business in 2018
4. Adani group has also recently entered into the development and maintenance of six
airports that had been put up for private sector.
5. Adani Land Defence Systems and Technologies Ltd, a step-down subsidiary of Adani
Enterprises, bought 51% stake in the small arms business of Gwalior-based PLR Systems.
Adani has also collaborated with Swedish defence giant Saab.
2. Internationalization strategy adopted by the chosen group of
companies
Indonesia:
Acquired Bunyu Coal mine in Indonesia,
Rationale: The project in Indonesia was the Adani Group’s maiden overseas project in coal
mining and operations. The move was in line with long-term resolve to support the growing
coal demand in energy-starved India.
The journey led to the creation of PT Adani Global, a step-down subsidiary of Adani
Enterprises Limited with focus on coal mining, logistics and trading operations in Indonesia.
Subsequently the company acquired Exploitation License from the Indonesian government in
2007.
Located in the island of Kalimantan, alternatively known as Borneo, the company has
constructed a coal terminal to service its mining operations. The present capacity is 2500
TPH and to be upgraded to 5000 TPH.
They constructed a coal terminal to service the mining operation. The run of mine coal is
crushed to produce a thermal coal product for export and domestic markets.
Adani also secured "Coal Purchase Rights" and entered into "Take or Pay arrangement" for
"Port and Rail Project" in Indonesia".
Mode of Entry- Strategic alliance
The company through this deal also enjoyed first mover advantage.

Australia:
Rationale: Adani Australia is a multi-dimensional energy and infrastructure company with
major focus on delivering energy solutions in Australia and the Asia Pacific region from
thermal and renewable energy,
Adani Australia owns and operates Abbot Point Terminal which has been exporting
Queensland coal responsibly for more than 35 years. It is Australia’s most northerly coal port
and is located 25 kilometres north-west of Bowen, in North Queensland. The port is a
modern, high volume, fast turnaround port complex with natural deep water, and is a multi-
user port facility that currently has capacity to throughput up to 50Mtpa.
Adani Renewables Australia's first solar farm Rugby Run near Moranbah was officially
opened in October 2019, supplying 65MW of renewable energy powering about 23,000
Queensland homes. A power purchase agreement was signed to sell 80% of the energy
generated. More than 247,000 solar panels were installed, which generates 185,000MWh of
power each year. Adani Renewables Australia is also currently in commercial negotiations
for its second solar farm in Whyalla.
Adani Mining Pty Ltd is an Australian mining company that operates out of regional
Queensland.
Adani Mining’s flagship development is the Carmichael mine and rail Project. Located more
than 300km west of the Queensland coast, the Carmichael Project is ideally positioned to
maximise the opportunities that the Galilee Basin presents.
The Carmichael Project is a thermal coal mine and rail project, which will transport coal from
the Galilee Basin to countries in Asia, including India.
They can deliver 10 million tonne per annum mine, combined with a 200km narrow gauge
rail line that connects with existing rail infrastructure through to the Port of Abbot Point,
communities like Townsville, Rockhampton, Mackay, Bowen, Gladstone, Central Highlands
and the Isaac regions.
Mode of Entry- Wholly owned subsidiary- Adani Australia
The company enjoyed first mover advantage by pre-empting demand for coal and through
relationship with the government of Australia.

Malaysia:
Adani Ports and Special Economic Zone Ltd (APSEZ) in 2017 signed an MOU with MMC
ports to set up container ports in Malaysia.
Rationale: Malaysia is very strategic to APSEZ global strategy and with straits of Malacca
being a global shipping route it will help drive their global transhipment strategy further.
With Vizhinjam port on one side Carey Island port on the other they will be able to give
transhipment solutions to global shipping lines. Malaysia with its supportive, transparent and
proactive government policies makes it ideal destination for investment
Mode of Entry- Strategic alliance

Japan: With Kowa Company

Rationale: Adani Enterprises in 2011 signed a partnership agreement with Japanese
diversified business group Kowa Company, entailing joint cooperation in common areas of
business-like infrastructure and trade such as exports in both countries. Kowa will facilitate
Adani's initiation to do business with Japanese firms and help the Indian conglomerate
develop its key businesses like ports, shipping, coal mining, transportation of coal and power.
Mode of entry- Joint Venture