Ambani Versus Adani: From Super-Apps To Energy, Two Titans Fight It Out

Reliance Industries is looking to acquire REC Group, Europe’s largest solar panel manufacturer, according to reports. It is currently owned by China National Chemical Corporation.

Entering The Rival’s Turf

The move comes months after Mukesh Ambani announced the group’s plan to foray into the green energy sector during the Annual General Meeting (AGM) with shareholders in June. The group already operates in the energy sector through its core petrochemicals business. However, it now wants a pie of the growing renewable energy business in India.

Just a month later, the Adani Group, which runs one of the largest renewable energy companies in India, announced its plans to step into the petrochemicals business, where Reliance is a major player.

A Hunger For Growth

Reliance, which was founded by Dhirubhai Ambani, originally started off as a textile manufacturer which marketed its textile product under the ‘Vimal’ brand. Years of backward integration took it from textile manufacturing to chemical manufacturing and finally to crude oil refining and petrochemical production. After the patriarch’s death and a long legal tussle, Mukesh Ambani inherited the petrochemicals business.

Reliance Industries has since expanded into telecom, retail and several other businesses supported by the petrochemicals cash cow. Though his brother, Anil Ambani, took over the original telecom business, Mukesh Ambani rekindled his telecom dream with the launch of Jio in 2016.

The group motto is ‘Growth is Life’ and its favourite path to growth appears to be acquisitions. Not only has it acquired digital startups to augment its Jio Platform, but it has also been acquiring large companies like Hamley’s Toys, Just Dial, DEN Networks and Hathway Cables among others.

With REC’s acquisition, Reliance will have a strong hold on the solar renewables business. It has already established two subsidiaries — Reliance New Solar Energy Limited and Reliance New Energy Solar Limited to conduct the renewables business. Mukesh Ambani’s son Anant sits on the board of both the companies.

In contrast, the Adani Group is run by Gautam Adani, a first generation entrepreneur. The group began operations as a commodity-trading firm and later entered the infrastructure businesses.

Today, it operates power plants, mines, ports and railway lines world over. The rapid pace of growth is evident from the fact that the group began operations in 1988 and had already entered the capital-intensive port sector within seven years of operations. Despite its large size, the group’s businesses continue to grow at a strong pace.

The Adani Group operates in the energy sector through its subsidiaries Adani Green, Adani Power and Adani Total Gas. Adani Green, its renewable energy arm, has three gigawatts in operation and another three under construction. Adani Total Gas has won gas distribution licences in several geographical areas and currently distributes gas in several areas. The power arm, Adani Power, is a major power supplier to several states. To secure coal supplies for its power plants, the group has also entered coal mining in India and Australia amid controversies.

While both businesses have generally kept away from each other’s turfs, Reliance’s entry in the renewable energy space seems to have pushed Adani Group to move into the petrochemicals space.

Digital Foray

But the story doesn’t end there. Just a fortnight after announcing its petrochemicals plans, Adani Group announced its plans to enter the digital space with a super-app. According to Gautam Adani, the digital business has the potential to become the best and the largest performer in the group and drive it closer to the group’s trillion dollar valuation target.

Jio Platforms also has its own digital super-app named ‘My Jio’ through which users can pay bills, access news, watch television, listen to music and perform several other actions. With the high number of use cases, super-apps hope to become a one-stop-shop for all of the customer’s needs. The Tata Group has also been looking to launch it super-app.

The Adani Digital Lab aims to on-board every Adani customer on the super-app. It already has a strong existing retail consumer base through its gas distribution and electricity businesses. His son Jeet Adani and nephew Sagar Adani will be looking after the digital businesses. The group already operated multiple apps for its different businesses. A super-app could consolidate these apps under a single umbrella. But well-funded competitors like Jio will certainly challenge Adani’s dream.

So far, both business groups have grown to massive proportions over a short period of time and have displayed the ability to cut through red tape and get things done, quickly. While increasing competition bodes well for customers, it might not bode well for the players in the industry. The renewable space already suffers from low tariffs amidst high competition.

Similarly, the super-apps space is already crowded with multiple unicorns and platforms fighting for dominance. The fight between two of India’s largest business houses is likely to be quite interesting.