adani group

Business policy presentation on……….

Presented by:Swarupananda Deogharia

Jyoti Bhagchandani

Abhijeet Sharma

Krishna Mourya

Urvi Parekh

Amit Gala

http://en.wikipedia.org/wiki/File:Adani_Group_Logo.svg

Adani Group is Gujarat based Indian conglomerate company headquartered in Ahmedabad, Gujarat, India

It was founded by Gautam Adani, in the year 1988.

The core businesses of the group are commodities trading, edible oil manufacturing, Mundra port operations and distribution of natural gas

Apart from its core businesses, the Adani Group has also

diversified into Real Estate, Ports, Special Economic Zones and IT enabled services


Mission - To assimilate knowledge, develop capabilities and manage collective enterprise to profitably tap global commercial opportunities and advantages for the benefit of stakeholders and society.

Vision - To be a globally competitive, India centric organization, with leadership in trading and integrated businesses; committed to the delight of our customers and shareholders

CORE BUSINESS

Resources Logistics Energy

Trading activities of

Adani Enterprises Ltd

Projects of Adani

Enterprises Ltd

Adani Agri Fresh Ltd (100%)

Adani Agri Logistics Ltd (100%)

Adani Wilmar Ltd (50%)

Adani Infrastructure and Developers Pvt

Ltd (95%)

Adani Welspun Exploration Ltd (65

%)

Adani Gas Ltd (100 %)

Adani Power Ltd (70.25 %)

Adani Mining Pvt Ltd (100 %)

Adani Global FZE,Dubai(100%)

Adani Global Pte Ltd. Singapore

(100%)

Controlled Atmospheric

Storage Facility

Grain Silos

Edible Oil Refining

Mundra Port and SEZ Ltd

(MPSEZ)

Oil and Gas Exploration

City Gas Distribution

Power Generation

Coal Mining

Power TradingBusiness of


Coal Trading Business of



Resources comprises coal mines and trading, and will include oil and gas in future;

Logistics denotes a large network of ports, SEZs and multi-modal logistics, railways

Energy involves power generation and transmission and gas distribution.

Resources

Starting with the plastic polymer import, it gained a foothold in the commodities trading business .This large scale trading business provided Adani Exports with

Ability to aggregate demand Access large Capital

Well-oiled distribution mechanism

Knowledge of international business

Possible Political connections

Experience in supply chain management

Capabilities

2010 2011 20200

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

660

3960

20000Power capacity (in MW)2008 2009 2010 2011

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

3694

1303

5210

16441

Market capitalisation (in $ million)

2008 2009 2010 20110

5

10

15

20

25

30

35

10.99

22.25

28.7631.48

Coal imported (in million MT)

2008 2009 2010 20110

0.5

1

1.5

2

2.5

3

0.640000000000001

1.22

2.322.52

Coal mined (in million MT)

Adani group SWOT analysis Strength

•The diversified nature of the Adani Group helps in the growth of Adani Power

•Strong Project - Execution record

•Since the largest supplier of coal is Adani Enterprises, this reduces the cost of coal to Adani Power

WeaknessPresent only in very few states namely Gujarat, Maharashtra and Haryana.

Opportunity:

• Can diversify into Hydro-electric power generation.• significant opportunity for Adani Power to expand its operations and compete with other contenders• Opportunity to establish presence in other parts of the country

Threat

• Changes in International prices of coal.

Changes in International policies regarding import of coal.

Facing delay problem in security clearances from GOVT in different ports


Mar 05, 2012: Adani Enterprises To Supply Coal To NTPC's Power Stations

Jan 19, 2012: Aries Completes Design, Supervision And Commissioning Services On Solar PV Power Plant In Gujarat, India

Dec 26, 2011: Adani Enterprises Announces Tenders For Selection Of LSP For Transportation And Delivery Of Coal From Mahaguj Collieries

Aug 10, 2011: Adani Enterprises Reports Net Sales Of INR95.96 Billion In Fiscal 2011

Jan 25, 2011: Adani Group Signs MoU To Explore Possibility Of Lignite Based Power Plant In Indonesia

Key Recent Developments

Adani Foundation

Shimla

Health and Sanitation

Adani Vidya Mandir

Education and medical grants

Rural Development

Rural Development

Education

Community Health

Rural Infrastructure Development

Sustainable Livelihood

Rural Developme

nt

Adani DAV public school

Dahej Ahmedabad Tiroda Mundra

Levels of Strategy

Competitive strategy Corporate strategy

how a firm competes within a particular market concerned with the use of resources and capabilities to create competitive advantages

where a firm competes is the overall plan for a multi-business unit company.company adds value through the configuration and organization of its multi-market activities

•Cost leadership•Differentiation•Focused differentiationOrFocused on Niche Market

What business the corporation should be in

How the corporate office should manage the array of business units

An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition..

A differential advantage is created when a firm's products or services differ from its competitors and are seen as better than a competitor's products by customers.

“Providing something unique that is valuable to thebuyer beyond simply offering a low price .” (M. Porter)

THE KEY IS TO CREATE VALUE FOR THE CUSTOMER

‘

Competitive strategy

cost advantage ability to produce good or service at

a lower cost

ability to sell its good or service at

a lower price

generate a larger margin on sales

Adani power

Power generation Under Execution

Mundra Tiroda Kawai

(APL) is implementing 4620 MW Power Plant Phase -1 : 2 x 330 MWPhase - 2 : 2 x 330MW Phase - 3 : 2 x 660 MW Phase - 4 : 3 x 660 MW

Adani Power Maharastra Limited (APML) is implementing 3300 MW Power Plant. Phase -1 : 2 x 660 MW Phase -2 : 3 x 660 MW

Adani Power Rajashthan Limited (APRL) is implementing 1320 MW Power Plant. Phase-1 :2 x 660 MW

Mundra - Dehgam transmission line of 430 Kms, which is the longest dedicated transmission line by private sector.

This will be the first HVDC transmission line by private sector in the country. APL is also setting up another 1000 Kms ± 500 KV HVDC transmission system for supply of power to HPGCL.

50km 400kV Mohindergarh-Bhiwani transmission line for supply of power to HPGCL.

Adani Power Maharashtra Limited (APML), a subsidiary of APL, is developing a 221km 400kV Tiroda-Warora Transmission Line

Power Transmission

2640 MW Coal based Thermal Power Project at Dahej, Gujarat through its subsidiary company Adani Power Dahej Limited.

1320 MW Coal based Thermal Power Project at Chhindwara, Madhya Pradesh through its subsidiary company Adani Pench Power Limited

3300 MW Coal based Termal Power Project at Bhadreshwar, Gujarat through its subsidiary company Kutchh Power Generation Limited

100 MW Solar Power Project at Surendranagar, Gujarat through its subsidiary company Adani Renewable Energy LLP

Future Projects

Adani Power

Strengths• Strong execution track record on the back of the huge success of Mundra Port• The diversified nature of the Adani Group•Great distribution channel of raw material handling system•Coal mine resources

Weakness• delays in coal supplies from

Adani Enterprises as it is Adani Power’s holding company

• Other private owned companies are also in power generation

Opportunities• Adani group’s presence in domestic coal mining will reduce coal cost as currently Adani Enterprises is the biggest supplier of coal to Adani Power

Threats• The rising Maoist insurgency could result in delays and higher costs

Increase in private sector power generation

20

Porter’s Five Forces Model (Adani Power)

Porter’s Five Forces analysis

Rivalry is very less

The major rivals of the company

are NTPC, Power Grid Corp,

Reliance Power, Tata Power,

Price of electricity is more or less

same in the entire industry

Industry growth is high

THREATS OF NEW

ENTRANTSLOW

High capital investmentResource scarcity

regulatory approvals

BUYERS BARGAINING

POWER(LOW)

Buyers group is not

powerful Shortage of electricity

supplyLess

numbers of suppliers

(electricity producers) Consumers

are less price

sensitiveMajority of consumers

are households

APL and JSW Energy

Operational capacity(MW) APL JSWEL

FY10 1320 1295

FY11 1980 3140

FY12 6600 3140

Corporate Strategy is the way a company adds value through the configuration and organization of its multi-market activities

The definition has three important aspects: Value Addition - the generation of superior financial performance from

multi-market activities that create corporate advantage Configuration - the multi-market scope of the corporation

(product/market diversification, geographic focus, and vertical boundaries)

Organization - the management of the inter-linkages between businesses and the head office

The goal of corporate strategy is to build corporate Advantage so as to earn above normal returns

Corporate Strategy

A firm is diversified if it is in two or more lines of business

Degree of relatedness between the business units is often determined by comparing their value chains

when certain stages of the value chains “fit” each other, we consider such diversification related

No or little strategic fit = unrelated

Diversification:

Diversification(product lines)

Vert

ical

Inte

gra

tion

With the increased export and import, Adani group was facing port infrastructure problems that affected its business negatively.

This prompted Adani group to undertake private port development in Mundra.

Motive for Diversification

Adani group undertook another “related” diversification in SEZ by developing an integrated SEZ in Mundra so that the Mundra port could be utilized to the full capacity.

The Adani power plant is located very close to a coal-jetty which lowers the transportation cost of the raw material. Close proximity to the sea ensures water for steam generation and cooling.

Related or unrelated?

Diversification

Port and SEZ Edible Oil Power Generation

•Increased export and import • Private port development in Mundra• Adani group undertook another “related" diversification in SEZ • The key success factors in setting up a port include – tie-ups with major container lines a balanced import and export cargo mix

• The Mundra port adopted modern cargo handling facilities which are more operationally efficient

• Leverage its own distribution network to give them a competitive advantage

• One of the major areas where one could get a competitive advantage was in managing the supply chain

• Transportation accounted for about 70% of the total supply chain cost

• Consumption patterns of various edible oils differ from region to region

• Availability of cost-effective fuel sources

• One of the major commodities Adani group imports is coal

• The coal imported through the Mundra port is being used by Adani power

• Currently, coal powers more than half of India’s electricity plants

• Adani Power had twin aims–

exploit growth potential in the power sector

satisfy the energy needs of Mundra SEZ.

Reasons For Diversification

Power Generation

• Av

Ports Indian ports(Kandla and Mumbai ports )were getting congested which in turn affected exports and imports through Adani Exports.

State government came up with a policy on port privatization in 1995

To facilitate trading to make smooth and well integrated supply chain

Providing strategic competitive advantage over competitors in related businesses

Edible Oil: Huge market potential, AWL has more than 45% of market share

India the largest importer of edible oils in the world more than 4 mn tonnes.

A growing population, increasing rate of consumption increase the demand for edible oil.

Transportation accounted for 70% of total supply chain cost.

Adani Energycost-effective fuel sources throughout the lifetime of the project

The coal imported through the Mundra port is being used by Adani power. Currently, coal powers more than half of India’s electricity plants.The power plant is located very close to a coal-jetty which lowers the transportation cost of the raw material.

Close proximity to the sea will ensure water for steam generation and cooling

Corporate-level Strategy

What businesses that we are not in, but

should be in?

What businesses that we are in, but

should not be in?

ADANI OIL & GAS EXPLORATION

ADANI RETAIL ADANI STEEL

ADANI REAL ESTATE

Corporate-level Strategy

THANK YOU