NEW DELHI: Like Bill Gates, Warren Buffett, and Azim Premji, Gautam Adani is likely to take the stock transfer route to fund his ambitious Rs 60,000 crore donation pledge, said a person familiar with the development.
Last week, Asia’s richest billionaire Gautam Adani and his family had pledged to donate `60,000 crores to charity to mark his 60th birthday. The group, however, is yet to update on how it would be funding this cause and the timeline this massive amount would be spent. A statement from the company had said that the amount (committed to charity) would be administered through Adani Foundation.
“Adani would transfer Rs 60,000 crore worth of his shares to the foundation. He will not write a cheque,” said a person close to the development. Most billionaires worldwide, including India’s top philanthropist and Wipro founder Azim Premji, routinely transfer shares owned by them to their foundation/trust or foundations of their choice to fund their charitable cause.
These foundations also own a large chunk of shares in the company from which these shares are transferred, benefit when there is a rally in the market, and get rewarded with handsome dividends. According to a top investment banker, the pledged donation won’t have any impact on group company share prices at the moment and these commitments are met over a very long period of time.
“Adani Group’s market capitalisation is one of the highest in India and the promoters own a very large chunk of shares in all its seven listed companies. The worrying part is its high debt and exorbitant Price-to-Earnings ratio of many stocks which in future may impact the lofty valuation,” he said requesting anonymity.JN Gupta, co-founder, and MD, SES Governance, a proxy advisory firm, said,
“It is his wealth and his shares, he has every right to do it. The transfer of shares would not affect the voting rights so I don’t think minority shareholders will have any problems with the arrangement.” Gautam Adani’s net worth on Tuesday was pegged at around $96 billion, 12x more than the pledged Rs 60,000 crore ($7.6 billion) at current valuations.