Another Icarus in the Making?
Monday, 11 July 2022
Gautam Adani just recently expressed his opinion to enter the not-so-crowded telecom industry. One announcement from him was all it took to send Airtel tumbling 5.2% and Vodafone Idea rising more than 6%. While that may or may not be a good idea what can be said with definite clarity is that even Adani has a limit to his dizzying growth. Yes, the way things stand that doesn't sound very likely but trust me Adani's leveraged position makes a much bigger debt-fuelled growth impractical if not impossible. Anil Ambani was not very far from the sun during his heydays much like Adani but his house of cards came tumbling down when his creditors came calling on him. Remember Icarus's wax wings melted when he ventured to fly near the sun. Ambitions, my friend, are healthy in controlled doses but like everything else out there unhealthy in extreme overdoses. For now, I don't think we need to worry too much about Adani disrupting the telecom business because he surely must be busy trying to weasel as much an ROI out of the Cement business he just bought for many more billions of debt. What we need to be on the lookout for are Adani's debt payments. If at any point they start faltering we may be looking at the Lehman crisis of emerging markets.