MUMBAI: Billionaire Gautam Adani’s conglomerate unveiled plans to overhaul its operating model in an effort to cut decision-making time as it pushes for accelerated growth across businesses.
The Adani Group will introduce a three-layer organisational structure with fewer decision-makers and have greater focus on liquidity and access to capital, Adani said in an internal memo to employees on Labour Day, without giving the specifics.
The streamlined hierarchy will see leaders pushed closer to project sites, cut decision-making time from days to hours and strengthen the accountability across business units, he said.
The move comes amid a surge in investment activity in India, the world’s fastest-growing major economy, prompting a race among conglomerates to be sharper and deliver faster as they compete across infrastructure, energy and consumer-facing sectors.
This marks Adani’s second major overhaul since 2015, when it spun off its ports and power businesses into separately listed entities.
That round of change unlocked shareholder value by removing the holding-company discount and simplifying the group’s structure, giving holders of the flagship entity, Adani Enterprises Ltd, direct exposure to underlying operating companies.
The group houses India’s largest private sector ports and airports operators and runs more than 700 sites across 24 states.
It engages nearly 400,000 employees, partners and contractors.
The conglomerate is diversifying funding and raised US$2bil from the local market last year and has plans to scale up to US$10bil over three years, chief financial officer Jugeshinder Singh had said previously.
Adani Group said it has kicked off the process of building accommodation for 50,000 workers across its major sites.
It is spending around 50 billion rupees (US$527mil) to build a township across more than 175 acres in Mundra in Gujarat state for its workers.
The conglomerate has also doubled the pace of its capital spending plan and now intends to outlay US$100bil in five to six years instead of spreading it out over a decade as announced before.
Adani Enterprises last Thursday approved raising as much as 150 billion rupees by selling shares.
The company reported slipping into a loss last quarter, a performance that may complicate capital spending plans, crucial for long-term expansion.
The company also has several other issues hanging over it.
The group’s US$1.2bil copper plant has hit a string of technical setbacks since it was commissioned 10 months ago, raising concerns about the future of an operation vital to adding supply outside China.
The Kutch plant has yet to produce meaningful volumes of copper as a result of the engineering trouble and was closed for repair work in late March, Bloomberg News reported earlier this week.
The group also needs to get a US fraud case against its founder dismissed before fully reviving overseas fundraising.
The case has dragged on for almost 18 months since the US Securities and Exchange Commission (SEC) alleged that the Adanis violated US securities laws.
Lawyers for Adani last month sought to have the case dismissed, saying the SEC lacked necessary jurisdiction. — Bloomberg
