The Adani group has discussed the idea of buying a portion of PIF’s stake in Aramco.
Indian conglomerate Adani Group is exploring possible partnerships in Saudi Arabia, including the possibility to buy a stake in the world’s largest oil exporter, those in the know said.
The group, led by Indian tycoon Gautam Adani, is said to have held preliminary talks about a range of potential cooperation and joint investment opportunities with Saudi Aramco and the country’s public investment fund. It has discussed the idea of buying some of the PIF’s stake in Aramco, the people said.
While Adani is unlikely to spend billions of dollars in cash for Aramco stock, at least in the short term, it could try to tie an investment to a broader agreement or asset swap deal, the people said. The Indian company could partner with Aramco or subsidiaries such as Sabic in areas such as renewable energy, crop nutrients or chemicals, one of the people said.
Adani may also provide the PIF, Saudi Arabia’s sovereign wealth fund, with an opportunity to invest in infrastructure in India, another person said. The deliberations are at an early stage and Adani has not yet made a decision on what form a possible partnership could take, the people said.
A deal could help Aramco deepen relationships with one of the world’s fastest growing energy consumers. The Saudi petroleum giant has 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., but the talks are being scrapped in November. Aramco said at the time it would continue to look at investment in India.
A representative of Adani Group did not immediately comment. Spokespersons for Aramco and the PIF declined to comment.
Last month, the Saudi government transferred a 4% stake to PIF. The shares are now valued at about $89 billion based on Aramco’s closing price on Thursday in Riyadh. PIF has recently sparked discussions about how to monetize that holding company while raising money for its ambitious investment goals, Bloomberg News reports.
Gautam Adani is the second richest person in Asia according to the Bloomberg Billionaires Index with an estimated net worth of about $90.5 billion. His conglomerate has a range of businesses in ports, energy, renewables, airports, coal trading and data centers.
In January, Adani signed a pact with South Korean company Posco to explore business opportunities in India. The agreement includes setting up a green steel plant in Gujarat, with a potential investment of as much as $5 billion in the coming years.
Saudi Arabia has been trying to strengthen ties with India for years. During a 2019 visit to meet Prime Minister Narendra Modi, Saudi Crown Prince Mohammed Bin Salman said the country could invest $100 billion in India.
The PIF has since closed several deals in India, buying a stake in Reliance’s retail business, wireless arm and fiber network assets. The Indian conglomerate has also appointed Yasir Al-Rumayyan, who is chairman of Aramco and governor of PIF, to its board of directors.
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