Adani Group plans e-commerce, payments expansion, says FT report
The Adani Group is looking to diversify into consumer-facing businesses, according to a report by Financial Times, and is building a consumer-facing digital presence.
The Adani Group is looking to expand into e-commerce and payment services, business daily Financial Times reported on May 28, citing several people familiar with the development.
The FT report said the Adani Group is looking to apply for a licence to run on the Unified Payments Interface (UPI), and is also in talks with banks to finalise plans of a co-branded Adani credit card.
If approved, the group will enter India's digital payments landscape and compete with incumbents Google Pay and Walmart -backed Phone Pe.
Financial Times reached out to the Adani group and they declined to comment.
The Adani Group is also reported to be in talks to offer online shopping through the e-commerce platform Open Network for Digital Commerce (ONDC), the FT report added.
The FT report cited people familiar with the matter and reported that the e-commerce and payments foray aim to 'initially target existing users of its businesses'. A large number of people use Adani's gas and electricity services, or travel to airports that it operates. Financial Times cited people stating that users on Adani app could gather loyalty points for bill payment or duty-free purchase, and then redeem them for shopping online.
The report also stated that Adani Group may add content from NDTV - the media entity it owns - to its app this year.
Earlier, Money control had reported on the group's plans to raise funds to invest in new energy businesses.
The Adani Group is in the process of recovering from a January 2023 report by U.S. short-seller Hindenburg that triggered a sell-off in group's listed shares. So far, four of the seven group companies have surpassed pre-Hinderburg report levels, including Adani Enterprises⍐.
MONEYCONTROL NEWS
MAY 28, 2024
Adani plans push into Indian ecommerce and payments
Group set to leverage new public infrastructure in order to compete with rival Reliance and Big Tech
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Gautam Adani has become Asia’s second-richest man by amassing a vast infrastructure
and logistics network © Punit Paranjpe/AFP/Getty Images |
India’s Adani Group is in talks to expand into ecommerce and payments, according to four people familiar with the matter, as the conglomerate builds a digital business to compete with the likes of Google and Mukesh Ambani’s Reliance Industries in the world’s most populous country.
The plans come as the group’s politically well-connected founder Gautam Adani seeks to move on from damaging scandals and diversify his empire into fast-growing consumer-facing markets. Adani has become Asia’s second-richest man by amassing a vast infrastructure and logistics network of ports, airports and power.
The company was now weighing applying for a licence to operate on India’s ubiquitous public digital payments network, the Unified Payments Interface, and was in talks with banks to finalise previously announced plans for a co-branded Adani credit card, the people said.
Separately, it was in negotiations to offer online shopping through India’s fast-growing, government-backed public ecommerce platform, the Open Network for Digital Commerce, they added. ONDC and UPI make up part of India’s digital public infrastructure “stack”, which attracts hundreds of millions of users a month and has become popular with groups competing to build consumer technology businesses.
“There are just three business conglomerates running this country — the Tatas, the Ambanis and the Adanis,” said Jayanth Kolla, a Bengaluru-based technology analyst. “Adani is the one of the three groups which does not have significant consumer-facing businesses.”
If finalised, the services will be available through Adani’s consumer app Adani One, launched in late 2022 and offering travel services such as flight and hotel bookings.
Google and Walmart-backed PhonePe already operate widely used UPI-based payments apps, while domestic groups such as Paytm and Tata offer grocery and fashion shopping through ONDC. The “interoperable” networks mean that companies do not need to invest in their own proprietary payments or ecommerce platforms as they can transact through other providers.
Adani’s consumer push comes after a scandal last year in which US short seller Hindenburg Research accused it of market manipulation and fraud. The allegations prompted a $150bn rout in Adani’s listed stocks and attacks from opposition leaders over the founder’s long-standing ties with Prime Minister Narendra Modi.
The company has remained in the spotlight during India’s ongoing elections. The opposition has vowed to investigate Adani if elected over a Financial Times report last week that it had passed off low-quality coal as more expensive, cleaner fuel in sales to a state utility. Modi, too, has accused his rivals of taking “black money” from Adani.
The group denies wrongdoing and India’s securities regulator has not yet released the outcome of a probe into the Hindenburg allegations. Meanwhile, Adani businesses have rebounded, with shares of its flagship company Adani Enterprises recovering almost all of last year’s losses.
On Tuesday, the board of the conglomerate’s flagship Adani Enterprises approved plans to raise up to Rs166bn ($2bn) through a share sale, following the group’s power transmission firm Adani Energy Solutions giving the nod earlier this week for a $1.5bn equity issue.
The fundraising plans come more than a year after Adani Enterprises canned a $2.5bn share placement when Hindenburg’s allegations prompted a stock price collapse across the group’s listed companies.
Adani’s consumer push is happening as it seeks to expand and integrate disparate parts of its business empire such as NDTV, a broadcaster acquired in 2022, and its Adani Wilmar joint venture selling food staples such as rice and wheat. It also plans to set up a think-tank focused on climate change, energy and politics.
People familiar with the matter said the company’s ecommerce and payments offerings would initially target existing users of its businesses, which they argued amounted to hundreds of millions of people when including gas and electricity customers and travellers at its airports.
They could, for example, acquire loyalty points through bill payments or duty-free purchases and use them for online shopping, the people said. Targeting existing users in this way would give Adani “a platform to move into much larger areas”, one of the people said. Another added that Adani was planning to add NDTV content to its app this year.
Analysts are sceptical about Adani’s prospects. Tata’s so-called superapp Tata Neu, launched in 2022, has gained limited traction, while Reliance has a multiyear head start in consumer businesses such as telecoms, retail and entertainment.
“You pay your bills once, you travel once or twice, that’s all,” said Satish Meena, an independent analyst. “These points are not a motivation for a customer to move to online shopping with Adani.”
Adani declined to comment⍐.
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