Adani storms Hindalco-Vedanta duopoly: Economic Times update

Published 6 July 2026 · finance

When Gautam Adani entered cement in 2022 through the acquisition of Ambuja Cements and ACC, many saw it as a natural extension of his infrastructure

When Gautam Adani entered cement in 2022 through the acquisition of Ambuja Cements and ACC, many saw it as a natural extension of his infrastructure ambitions. His subsequent move into copper through Kutch Copper reinforced the view that the group was steadily building a commodities portfolio around sectors critical to India’s industrial growth. Now, Adani has turned to aluminium, one of the country’s most strategic metals. The $11.5 billion joint venture with Abu Dhabi-based International Holding Company (IHC) is one of the largest investments in India’s metals sector. It is also an attempt to enter a market long dominated by two powerful incumbents, Hindalco Industries and Vedanta Aluminium.Also Read: Adani, IHC plan to forge $11.5 billion aluminium unitYet this may not be a story of a challenger trying to displace established leaders. The aluminium market that Adani is entering is already growing faster than domestic supply. India remains a net importer despite being the world’s second-largest producer. The group appears to be betting that the opportunity lies not in taking market share away from rivals but in positioning itself for a future where demand expands dramatically and aluminium becomes central to manufacturing, energy transition and infrastructure.A sector ruled by two giantsFor years, India’s aluminium sector has effectively been controlled by Hindalco and Vedanta. These two companies account for nearly 90% of domestic aluminium production and have built deep integration across mining, refining, smelting and downstream manufacturing.That dominance has not emerged overnight. Aluminium is among the most capital-intensive and energy-intensive industries in the world. Building a competitive business requires access to bauxite reserves, refining capacity, captive power generation and large-scale logistics infrastructure. Few companies possess the financial resources or operational capability to create such an ecosystem from scratch.That is why Adani’s proposed entry is significant. The group and IHC plan to invest approximately Rs 1.1 lakh crore through a 50:50 joint venture that will create a fully integrated aluminium complex in Odisha. The project will include a 4 million tonnes per annum alumina refinery, a 2 million tonnes per annum aluminium smelter, a 4,000 MW captive power plant and a downstream manufacturing park with capacity of 1 million tonnes per annum.The scale of Adani's gambit is difficult to ignore.

India produced around 4.2 million tonnes of aluminium in FY25. A smelter capacity of more than 2 million tonnes would eventually add nearly 50% to the country’s current output and instantly place Adani among the largest players in the sector.Also Read: Why aluminium is emerging as manufacturers' preferred alternative to copperWhy aluminium, and why now?The timing reflects both industry dynamics and Adani’s broader business strategy. Aluminium demand is expected to rise sharply over the next two decades as India expands manufacturing, builds transmission networks, scales renewable energy capacity and increases production of automobiles and consumer goods. According to the government's vision document for the sector, domestic aluminium consumption is projected to rise from about 5.5 million tonnes in FY25 to 8.5 million tonnes by FY30. The document estimates demand could reach 18 million tonnes by FY40 and 28 million tonnes by FY47.India’s per capita aluminium consumption remains only 3.4-3.9 kg compared with a global average of 8-12 kg. That gap is often cited by industry executives as evidence that the country is still in the early stages of aluminium adoption.Karan Adani has argued that growing digitisation and manufacturing activity will create sustained demand for the metal. He has also pointed to a more immediate reality that India continues to import aluminium despite substantial domestic capacity. "I think if you look at the overall market, even with such large capacities being there, large players being there, we still import aluminium, which is a sign that there is more demand and there is going to be enough room for everybody to be in this market," he said after the MoU signing in Odisha.That assessment explains why the group does not appear to view aluminium as a winner-takes-all market. The opportunity, from its perspective, is to help meet incremental demand rather than displace existing producers.The Adani advantage: Energy and integrationIf there is one area where Adani believes it possesses a structural advantage, it is energy. Aluminium production consumes enormous quantities of electricity. Power costs often determine whether a smelter remains globally competitive. The proposed project will include a 4 GW captive power plant alongside a 400 MW green energy component. "Aluminium is a very energy-intensive business, and as one of the lowest-cost producers of energy, it will be one of the biggest competitive edge that we bring to the table," Karan Adani said.This is where the group’s existing businesses become relevant.