L&T's asset-light vs. Adani’s capital-intensive model: which infra major will balance a wobbly GDP?

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Concept by Priyanka Salve; Kankana Roy Choudhury

Synopsis
L&T is on a path to become an asset-light business, while Adani Ports prefers expansion and acquisition. Both infra giants have outperformed the benchmark in the last six months. However, the market has preferred an asset-heavy company like Adani over L&T. With the GDP numbers looking shaky post-pandemic, which company’s model do the odds favour?

On May 16, 2014, infrastructure behemoth Larsen & Toubro’s (L&T) subsidiary, Infrastructure Development Project Ltd (IDPL), and steel major Tata Steel signed a pact to sell a 100% stake in Dhamra Port in Odisha for INR5,500 crore to a Gujarat-based ports company—Adani Ports and Special Economic Zone. L&T’s market cap in March 2014 was INR1.1 lakh crore while that of Adani Ports was just around INR38,800 crore. The day the deal was