New Delhi: The Adani Group has entered into a no-poaching agreement with Mukesh Ambani’s Realince Industries following which both the companies will be restricted from hiring talent from each other.
The agreement came into effect from May 2022 and will be applicable to all their businesses. This pact gets more interesting as two of India’s largest business groups have entered in sectors where both of them have a big role to play.
Adani and Reliance are competing in the petrochemical sector where the latter has a huge presence. They also cross paths in high speed data services as Adani has put up its bid for 5G Spectrum.
No poaching agreements have always been practiced in India and are becoming more prevalent. Rising wages are a risk to the company especially where the talent is scarce and salaries are rising constantly. No poaching agreements are legal as long as they don’t restrict an individual’s right to seek employment.
There is no such law which prevents two entities from entering into such agreements as long as they are not dominant in the sector. The Adani group is a major playor in renewable energy, power generation and distribution, ports, airports, solar as well as natural resources.
Given that Adani group and Reliance both have global ambitions in several businesses, this pact allows them to fence their talent pools in both India and abroad.
Most of such agreements are informal. But two big companies entering into such an agreement may prove to be restrictive for employees. Mukesh Ambani( net worth $88.8bn) and Gautam Adani ($150bn) account for 59 per cent of wealth held by the top 10 billionaires in India.
On the other hand Reliance’s market cap stands at Rs 16,94,143 crore. The Adani group has a market cap of Rs 21,28,656 crore.