The Adani Group is planning to expand its overseas
ports business, following the approval of a $553 million US Government
financing deal for a port terminal project in Colombo.
Adani Ports and Special Economic Zone (APSEZ) CEO
Karan Adani told Bloomberg News that the company is eyeing further “opportunities
in our neighboring countries”.
The move is seen as a strategic endeavor to counter
China’s growing maritime influence in the Indian Ocean. Adani Ports plans to
explore new opportunities in neighboring countries such as Bangladesh, East
African nations, and Southeast Asian countries like Tanzania and Vietnam, added
the report.
It may be noted that the conglomerate’s efforts to
secure US financing mark a crucial step in expanding its overseas presence.
While Adani Group is India’s largest port operator, it
remains a relatively small player in the international arena compared to China,
which has investments in over 90 ports outside its borders, including 13 with
majority Chinese ownership.
Chakri Lokapriya, chief investment officer at TCG
Asset Management Co, told Bloomberg that the group’s ambition is viewed as a “strategic”
play, aimed at countering China’s growing influence in the region.
This expansion comes after the conglomerate had to
shelve plans to build a port in Myanmar due to a military coup and faced
political criticism in Sri Lanka. It also coincides with Indian Prime Minister
Narendra Modi’s vision of an Indian-Middle East-Europe Economic Corridor, part
of which may run through Adani’s port in Israel’s Haifa.
While the recent US government financing deal provides
a significant boost to the Adani Group’s expansion plans, it may face
challenges in gaining international financial support due to ongoing scrutiny
of its business practices. The group’s auditor, Deloitte Haskins & Sells
LLP, resigned over concerns related to transactions between Adani Ports and
certain entities.
Additionally, rising costs of debt may pose a
challenge to funding the expansion. The group’s focus remains primarily on
India, which accounts for about 90 per cent of its revenues.
Citing the challenges, Michael Kugelman, director of
the South Asia Institute at the Wilson Center in Washington, told Bloomberg
News that Adani and his companies are playing a “long game”.
“They’re looking to slowly but consistently build out
new investments in South Asia and beyond,” he added.
Agencies
