The next chapter. Gautam Adani will take India's stock market by storm, again. That is all but assured by the industrialist's tried and tested playbook of using his flagship company to grow new businesses. After a crisis year induced by a short attack, the $44 billion Adani Enterprises is performing strongly and is worth watching closely.

Its net profit more than doubled in the three months to the end of December, compared to the previous year, earnings released this month showed. The company controlled by Asia's richest man boasts a striking track record as a launchpad for new ventures. Over the past 16 years, it has incubated six businesses across power and infrastructure that are now all individually listed.

Together, these spinoffs command $125 billion in market value and, with the exception of edible-oils maker Adani Wilmar, each have outperformed the MSCI India Index since their respective listings. Most striking is Adani Green Energy, an owner and operator of utility-scale wind and solar projects, where total returns have exceeded 5800% compared with 121% for the broader benchmark.

It’s a clever approach. Proceeds generated from Adani Enterprises' “primary industries” in polluting areas like coal trading, mining and mining services are supporting growth in critical sectors such as green hydrogen, airports, roads and data centres.

Investors are willing to pay high valuation multiples for the latter. Adani Enterprises trades on a 12-month forward price-to-earnings multiple of 50 times, compared to 10 for Coal India, per LSEG data. The method also allows the company to grow without borrowing excessively. Net debt is conservative at 2 times EBITDA in the trailing 12 months to the end of September.

The transformation is happening rapidly. Overall, the newer businesses including airports, roads and green energy generated 45% of consolidated EBITDA in the nine months to the end of December, from 35% in the prior year. And they deliver a margin on those earnings of 25%, compared to about 9% at the established businesses.

In effect, Adani Enterprises is hurtling towards the moment it will churn out its next wave of large initial public offerings. All of the upcoming businesses will be ready to float between 2026 and 2029, Adani Group Chief Financial Officer Jugeshinder Singh reckons. That is supporting a nearly complete stock price recovery since Hindenburg Research's short-attack on the wider group one year ago obliterated some $150 billion of market value.

A sum-of-the-parts analysis by Cantor Fitzgerald estimates the combined equity value of the roads, airports, data centre and solar manufacturing units of Adani Enterprises at over $70 billion, excluding the nascent green hydrogen venture. That's 60% more than the company's current market capitalisation, implying both a huge conglomerate discount and oodles of value to unlock.

It’s similar to the path tycoon Mukesh Ambani is taking. His $240 billion Reliance Industries is using its core, polluting oil-to-chemicals business to fuel the growth of its retail and telecom units. They generated 44% of its consolidated EBITDA in the financial year to the end of March 2023, up from around one quarter in 2019. Ambani has pledged to list those consumer-facing businesses but will still end up with far fewer publicly listed entities than Adani's count, already at nine.

Adani has held off from a public stock offering in the past year and instead sold equity in his group companies to institutional investors including Florida-based GQG Partners and Abu Dhabi conglomerate International Holding Company. Ultimately though, he'll be testing small investors and shaping India's $4 trillion equity capital market for years to come.