Not a single Adani company features among India’s top corporate taxpayers

Gautam Adani was once among the world’s richest people, before allegations of corporate fraud leveled by Hindenburg Research halved the value of his conglomerate. His companies pick up plum contracts in diverse sectors in India: mining, green energy, shipping, aviation, and power, among others.

One might, therefore, expect Adani’s companies—his flagship Adani Enterprises, in particular—to be among the top corporate taxpayers in India. But no Adani firm even features in the top 10.

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In 2022, Tata Consultancy Services (TCS) paid more tax than any other Indian company, followed by Reliance Industries and the software giant Infosys, the business daily Mint reported over the weekend. While TCS’s total tax bil for the fiscal year ending March 2022 stood at $1.4 billion, Adani Enterprises paid a mere $58.3 million during the same period.


Why does the Adani group not pay more corporate tax?

Seven eponoymous Adani companies are listed firms. Their total market capitalization stands at $123.2 billion, down from $267.1 billion on Jan. 24, when the Hindenburg report was released. The report triggered a massive sell-off in Adani stocks. Adani’s personal fortune crashed to $58 billion, dragging him down to to 21st spot in Bloomberg’s list of the world’s richest people.

Corporate taxes are levied only on profits generated, not on market capitalization. In 2019, the Indian government cut the corporate tax rate to 30% for companies with a turnover exceeding $48.7 million. This was done to tempt foreign firms to set up manufacturing units and create jobs. These goals remained largely unmet, in part because the pandemic froze all such new investment for a while.

With the 2019 cuts, the effective tax rate for Indian companies declined. As a result, they are paying a smaller chunk of their profits as tax. Large companies, additionally, avail of several exemptions to slash their taxes further.

The Adani group does not make as huge a volume of profit as Mukesh Ambani’s Reliance Industries or the State Bank of India (SBI), the largest state-owned bank in the country. The net profit of Reliance Industries and SBI stood at $7.4 billion and $4.3 billion respectively for fiscal year 2022, while that of Adani Enterprises was $94.5 million.

In 2022, Reliance Industries topped the Indian charts in terms of net profit, according to the 2022 Burgundy Private Hurun India 500 list (pdf). None of Adani’s companies were even on the list. Out of Adani’s many entities, the flagship firm, Adani Enterprises, is the only one to even be turning a profit. Gautam Adani’s personal fortune is not only divorced from the lossmaking nature of his companies but also exists mostly as “paper wealth,” linked to his holdings in his company stocks, according to Fitch Ratings.

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