Indian billionaire Adani explores partnerships with Saudi Aramco

Indian conglomerate Adani Group is exploring potential partnerships in Saudi Arabia, including the possibility of buying a stake in the world's largest oil exporter, people with knowledge of the matter said.

The group, led by Indian tycoon Gautam Adani, has held preliminary talks on a range of potential cooperation and joint investment opportunities with Saudi Aramco and the country's Public Investment Fund, according to the people. It has discussed the idea of buying part of the PIF's stake in Aramco, the people said. 

While Adani is unlikely to shell out billions of dollars in cash for Aramco stock, at least in the short term, it could seek to link an investment to a broader tie-up or asset swap deal, the people said. The Indian firm could team up with Aramco or subsidiaries like Sabic in areas such as renewable energy, crop nutrients or chemicals, one of the people said. 

Adani may also offer the PIF, which is Saudi Arabia's sovereign wealth fund, the opportunity to invest in infrastructure in India, another person said. Deliberations are at an early stage, and Adani hasn't made a decision on which form any potential cooperation could take, the people said. 

A deal could help Aramco deepen relationships in one of the world's fastest-growing energy consumers. The Saudi petroleum giant spent more than two years negotiating a potential $15 billion investment in the oil-to-chemicals unit of Indian billionaire Mukesh Ambani's Reliance Industries Ltd., only for talks to be scrapped in November. Aramco said at the time it would continue to look at investing in India.

A representative for Adani Group didn't offer any immediate comment. Spokespeople for Aramco and the PIF declined to comment. 

Strategic Ties

Last month, the Saudi government transferred a 4% stake to PIF. The shares are now valued at about $89 billion based on Aramco's Thursday closing price in Riyadh. PIF recently has kicked off discussions about how to monetize that holding as it seeks to raise funds for its ambitious investment goals, Bloomberg News has reported. 

Gautam Adani is Asia's second-richest person with an estimated net worth of about $90.5 billion, according to the Bloomberg Billionaires Index. His conglomerate has a range of businesses covering ports, power, renewable energy, airports, coal trading and data centers. 

In January, Adani signed a pact with South Korea's Posco to explore business opportunities in India. The agreement includes the setting up a green steel mill in Gujarat, with a potential investment of as much as $5 billion over the coming years.

Saudi Arabia has been looking to boost ties with India for several years. During a 2019 visit to meet Prime Minister Narendra Modi, Saudi Crown Prince Mohammed Bin Salman said the country could invest $100 billion into India. 

The PIF has since done several deals in India, buying stakes in Reliance's retail business, wireless arm and fiber-optic network assets. The Indian conglomerate has also appointed Yasir Al-Rumayyan, who's chairman of Aramco and governor of the PIF, to its board. 

Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement