>> in january 2023, just after indian billionaire gautam adani toppled jeff bezos to become the world's second richest person, a new york based short seller

delivered a gut punch. hindenburg research accused the adani group of pulling off what it called the largest con in corporate history. despite the adanis denying the allegations of stock manipulation and fraud, a stock selloff wiped more than $150 billion off the group's value, but shook investor confidence in the massive conglomerate and in india's equity markets and its regulators. >> adani cfo denied all these allegations. >> india's adani group says it is exploring legal action against a u.s. short seller, hindenburg research. >> up until now, he's sort of been out of the eyes of global scrutiny. >> and concerns around that and how they are faring financially have been brought up before. >> since then, adani has won a reprieve from the supreme court. the shares have recovered as the group slashed debt and won over new investors. it's against this backdrop that the 62-year-old founder revealed

to bloomberg that he wants to step down when he turns 70, and he is executing one of the world's largest and most challenging transfers of wealth to the next generation. the $250 billion adani group controls a big chunk of the infrastructure that runs india's $4 trillion economy. and a complex leadership transition from gautam adani to his two sons and two nephews is loaded with risk for the group, as well as the country and beyond. in a rare and exclusive interview in which adani would only discuss succession, bloomberg's anto antony asked the tycoon if the hindenburg report had an impact on his plans.

anto: mr. adani, you said that the succession plan was conceived about 10 years back. now the last two years' incidents, the investigations, the hindenburg report, has it affected it in any way, the implementation? gautam: in hindsight, i can say that this incident makes family more together and work very hard to fight back. and i definitely basically see that they have converted this incident into the great opportunity for family uniteness. secondly, they have worked hard, and whatever corrections in each and every aspect of our businesses we have to do. and in fact, basically these hindenburg issues of this last year, for adani group history, it is the highest performance.

>> as part of the succession plan, gautam adani's nephew, pranav, the eldest among the four, oversees most of the group's consumer businesses. he's also leading one of the company's highest-profile projects, redeveloping asia's largest slum, dharavi, located in india's financial capital, mumbai. older son karan runs a cement, ports, and logistics businesses, which are among the biggest in asia. karan's younger brother, jeet, is looking after india's largest network of privately operated airports, along with the group's defense business that builds weapons from small arms to missiles. and their cousin, sagar, oversees the group's energy projects, including the contentious coal arm. he is leading efforts to build the world's largest renewable energy park on a barren salt flat in western india. >> when the hindenburg report happened -- >> in a series of exclusive

interviews, the four of them told us about the fallout from the shortseller's allegations. sagar: i would say that this report came as a shock to many people who were not expecting anything of the sort. from our viewpoint purely, this report was nothing but accumulation of everything that was written and alleged over the last 10 years before that, but also very beautifully giftwrapped and presented in a way that was, you know, explosive and shocking, so to speak. there was nothing significantly new in that whatsoever anyways. so everything that the report said was in some way, form, or the other, there in news before. more importantly, the report that came, we gave a very, very long and comprehensive response in just 72 hours on every single point of the hindenburg report. strategic long term global equity partners, they have only doubled down since the hindenburg report came. so our interest from shareholders has only increased going from that point on, rather

than going the other way around. >> for some of the second-generation adani leaders, the hindenburg report came as a bolt from the blue, and they had to act quickly to ensure that the business continued to operate smoothly. jeet: i think it was definitely, personally speaking, a very stressful and tough time. you know, emotions were high. but i think the most important thing that was on my mind definitely was, what can i do to support, obviously, the family, but more than that, how do i support the larger family, which is the employees? because the biggest risk that you run in times like these is demotivation. people, you know, sort of losing hope. and to make sure that everyone is motivated, everyone knows that what we are doing is for a greater purpose. it is for we are making a real impact, and we continue day in and day out with the work. because these things happen. they come. they go.

but, you know, we don't want to lose motivations. anto: one overhang, even right now, is the kind of investigations or probes which are there into the company. and also at the same time there are allegations regarding opaqueness in the holding structure. how do you assuage the investor concerns on this front? karan: see, i think if you look at it from the investor perspective, as a group, we went through this transition from 2017. so if you remember, 2017, we had a holding structure. we had adani enterprise, and then we had all the other companies which were subsidiaries of it. and again, in getting feedback from the investors, they said that we would like to have a clean structure. and that's where we started demerging. so, ports got demerged, adani power got demerged. so basically, these shareholders who want to invest in ports, they know that they can. investors who know they want want to invest in energy, they know that they want to come into renewables.

so there is a clean structure from a holding perspective. so there is no crisscross holding, which is very common in other groups in india. so, there's no crisscross holding which is happening. so it's a very clear structure. family holds directly into each of these entities. second is when you look at it from a family holding perspective, all of that has been disclosed. because we have 23 -- 23 or 25 international issues, bond issues across various group companies, again, rated by all international agencies, investment grade rating. and part of it, unless you don't disclose all of this, there is not much -- you don't get through that hoops of getting that rating. and so, all of that has been -- all of that has been disclosed. pranav: there were learnings, i would say, from the whole hindenburg episode. as a group, we have always been very focused on operational excellence.

on execution. there are times when we have missed out in the kind of communications that we should do to our shareholders, to media in particular. now, from an optic point of view, we have become very clear that we go out and communicate more transparently about the structures and about things like the finances. and we are going out, communicating more. >> but at least seven of the group's companies have received so-called show-cause notices from india's market regulator sebi about allegations of non-compliance with listing regulations. and according to bloomberg reporting, u.s. prosecutors are examining whether an adani entity or people linked to the company, including gautam adani, bribed officials for favorable treatment on an indian energy project. the adanis say they have not received any notice from the u.s. justice department. the doj says no adani unit has been charged with wrongdoing and

that investigations don't always lead to prosecutions. coming up, the next generation answers the critics who say their family is too close to indian prime minister narendra modi's bjp. karan: being close to a political party does not necessarily mean that you get the work. >> when "inside adani" continues. ♪ ♪♪ ♪♪

♪♪ ♪♪ the winter escapes sale is now on. visit sandals.com or call 1-800-sandals. >> [speaking another language] >> that's indian opposition leader rahul gandhi right after the 2024 elections in which prime minister modi's party lost its majority in parliament. investors sold adani company stocks as soon as the results

were announced, cutting the group's market value by around $45 billion. while they have since regained ground, the selloff highlighted a key concern with the adani empire. anto: many people attribute your business growth to how you strategize your company's priorities to that of the government's priorities, whether it is state or center. is that something that you will ask the next generation to continue? gautam: so that is basically, the group has decided, irrespective of the government, that whatever the government basically decides the priority for the nation's point of view, we always believe on focusing our business in that direction. and i strongly believe that when the business direction is towards government priorities, you always basically get the tailwinds and not the headwinds, and that helps your group to grow faster. >> the opportunities in india's

infrastructure sector are enormous. morgan stanley predicts that the country will drive a fifth of the world's economic expansion this decade, generating more than $400 billion in annual output growth. and a fresh bid by the adanis to get an even bigger slice of that pie may face closer scrutiny under a weakened bjp government. anto: there seems to be a widely-held perception that the group's fortunes are very closely tied to prime minister narendra modi's. how do you address this concern? sagar: see, i think there is a very strong difference between perception and factual reality. people's perceptions are beyond a point we can't do much about. but if you look at factual reality of what we have done across the group, right, great majority of our growth period as the adani portfolio of companies in the adani group overall has come prior to the time of prime minister modi. even today, when a certain party is in power, we work in 22 different states all across the

country. many of those states are non-bjp states. right? ultimately, what people don't realize outside is that from a business perspective, most of the business is done in the states, not in the center. karan: being close to a political party does not necessarily mean that you get the work. you get the work because you are able to deliver, you are competitive in the market, and you are able to deliver on your commitments. and especially in the infrastructure business. we are not a fly-by-night operator. if i ask you for a concession of building a port, i better deliver it. because if i don't deliver it, i cannot have 15 ports. i will be stuck at one port. same as in the power or in renewables. so wherever we have delivered on that promise, we have delivered the infrastructure, and delivering green fuel infrastructure in india is not easy. we have made it one of the most profitable, and we have run it in a most efficient manner. you don't have these three

things, there is no point being close to any political party. because today's india is no more about giving favors. it is all about whether you are competitive in the landscape, or not. >> the adani strategy of aligning with the government's priorities has helped it become almost too big to fail. it's india's top importer of coal, its largest owner of renewable energy farms, and its second-biggest manufacturer of cement. adani-owned ports carry half the country's shipping containers, while more than 80 million people use its airports each year. and now, the group is taking its influence global, again, aligned with the government's strategic priorities. it's developing ports in vietnam, israel, and sri lanka that seek to challenge china's regional dominance. pranav: we are also invested in a lot of neighboring countries. now, when we enter any

neighboring countries, besides financial decisions that we take on the project, how good they are, we also look at what the host country requires, whether it is infrastructure, energy, resources. we are aligned with those countries' national priorities. and the most important is the strategic interest of india also should be aligned. so, when all those three align, i think this is the best investment strategy. so, i think it's false and incorrect to say that adani group is only invested or is only looking at where the present party is invested. karan: i think the ambition is by 2030 we want to be handling at least a billion tons of volume, predominantly coming out of india. because as india is going to grow, the trade is going to grow and obviously we are in the right position to take that sort of growth. i think the second point is to give a reliable supply chain solution into our neighboring countries and making india the center point of that whole supply chain. and that is the idea.

rather than getting goods shipped into dubai or singapore, how do we make india as the center point of the overall supply chain from east to west? and that's where we are looking to play. to create that larger vision of making india as the center point. >> the biggest example of how deftly the adani group can pivot towards the government priority is this massive renewable energy park they are setting up in the dusty salt flats of western india. covering an area five times the size of paris, it is expected to power 18 million homes when it's completed in five years. prime minister narendra modi has promised that renewable energy will fulfill 50% of india's energy needs by the end of this decade. so the adanis, who are india's biggest coal importers, say they're planning to invest over $100 billion into their renewable energy plants. sagar: we will participate.

from our perspective, the predominant preference and the push is to invest in renewables. so, more than 80% of whatever we are doing across the group is more than 75% of all capital we are spending across all the group companies is in sustainable energy solutions. so, that is transmission lines for evacuating green power, that is investing in generation capacity of renewables, that's in distribution of verticals that we have which enhance the mix of green energy in our distribution companies. so, it is basically across different things, but with a predominant focus on sustainable and green energy. we will invest roughly around $100 billion across the next 10 years in various energy sources. anto: so, in line with the government's current projections and roadmap, what is the timeline within which you are looking at phasing out coal? sagar: so government is looking at a gradual rampdown until 2060. so we have a lot of assets and we have obligations to supply to various state governments,

central utilities, to many discoms and to the end consumers ultimately. so those obligations -- contractual obligations of course have to be met. our platform is completely independent, so with the cash flow that the company generates, that company takes its independent call with regards to how it wants to invest its own cash flow. some of it will be used for growth. some of it will be used to distribute. but again, all those plans are going to be dependent on the demand profile of the country. >> up next, we ask gautam adani how he will avoid the family fractures that have roiled rivals. gautam: disintegration will never happen in the adani group. and i'm very much confident for that. >> when "inside adani" continues. ♪

gautam: when i gave the g2 the options of independent businesses, they decided collectively that they want multiple businesses, but one family. so, they have a strong unity among themselves. the succession is all about both continuity and change. and it is a gradual process. this will ensure that the succession is seamless, is

smooth, and sustainable. the structural succession plan is supported by strong cultural values. our values provide the glue that holds together our arrangement. >> gautam adani says under his succession plan, the four scions will need each other to run their businesses. common services for the entire group, such as hr, finance, i.t., and administration have been carved up among the four to make them communicate and work closely with each other. hr is under karan, while finance is under sagar. jeet runs i.t. and digital strategy. while pranav leads communications and branding. anto: when you move to the

second generation, if there are differences of opinion are bound to arise. how will you deal with those? karan: the biggest -- biggest key is communication. unless we don't communicate with each other, unless i don't know what my cousin or my brother is feeling, or what is their thinking process, or they don't know what i am feeling and thinking. what we have learned is that we need to keep communicating. there will be difference of opinion. there is the advantage of the four of us, because we keep that check and balance. sagar: so already there is a very, very close interaction between all the g2 members. we have our regular meeting cadences. we meet in a very structured manner once every week. we make sure that all important decisions are all socialized, are all discussed jointly, and there is in different aspects, different people take leads, but everyone's views are always incorporated in how we do everything. so, that is something that we have already been practicing

over the last about year and a half. and that is something that is becoming deeper and deeper and deeper as we move forward. >> and under the new leaders, the conglomerate may shun the high risk, high reward strategy that's been gautam adani's hallmark. anto: your father is a first-generation entrepreneur who from scratch built one of the largest conglomerates in the region. when the transition happens, for you to step into his shoes, those are some pretty big shoes to fill. how will you go about it? karan: as you move from first gen to next gen, i mean, we realize that what they are leaving us behind is a sort of legacy. as well as a not just a business, but a platform that we have to protect and ensure that we pass on to the next generation as well. we also realize we can't work the way he is working. in the sense that his risk appetite is much higher than what ours is. so, we realize where our shortfalls are, where our strengths are. and we work on our strengths and whatever we have learned from him, all the wisdom we have learned from him, we try to work on it on a day-to-day basis. anto: but hunger for growth is something which differentiates adani group from many others as

mr. gautam adani has said. now risk appetite is a key part of it. why are you saying that in the second generation the risk appetite could be slightly less? karan: it is bound to happen. right? so this is the evolution of life. first generation, you have grown from nothing. your risk appetite is much higher because even if you lose everything, you'll go back to where you had started. we are starting from a level which is something higher than what they had started. so, we have a larger responsibility to make sure that we protect and to grow from there. >> without any formal hierarchy, business management will almost certainly be testing and time consuming. but gautam adani is counting on what he calls the family's cultural values to make this a success. anto: mr. gautam adani has talked about the middle class values that the group espouses. now, the second generation has mostly been born into wealth.

is there a pressure to conform? karan: i would differ over that a little bit. because we haven't been born into it. a large part of our childhood has been through a struggle, as a family. it is just that in the last whatever, 15, 20 years is what we see. but a large part of our childhood has been of struggle. we have seen our parents struggle everyday basis. we have seen them go through tough times as well as good times. we have seen them aspiring for more and working hard. and we have seen them dream together to reach to that aspiration, and we have also seen a lot of support from the larger family, and, more importantly, valuing what we have. pranav: we are thankful to our first generation to help us with the value system, because it is the value system and the culture that really will take us through generation and generation. and we are trying to imbibe the same value system in our third generation, in my son, and in

future generations. >> [chatter] thank you. anto: and once the transition is complete, and once you have more time at hand, what will be your plans? gautam: ultimately, retire and be more relaxed. ♪

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