- Adani Enterprises Ltd (AEL) had incorporated Mundra Petrochem Ltd for setting up a greenfield coal-to-PVC plant at Adani Ports and Special Economic Zone (APSEZ) land in Kutch district of Gujarat.
- Adani Group has suspended work on a ₹34,900 crore petrochemical project at Mundra in Gujarat as it focuses on resources to consolidate operations and address investor concerns following a damning report by a US-based short seller.
- The group has shot off mails to vendors and suppliers to “suspend all activities” on immediate basis, “till further notice.”-as seen the mails by PTI.
- A group spokesperson said AEL will be evaluating the status of growth projects in primary industry vertical over the coming months.
- The Hindenburg report had alleged “brazen stock manipulation and accounting fraud” and use of offshore shell companies to inflate stock prices.
- The group has denied all Hindenburg allegations, calling them “malicious”, “baseless” and a “calculated attack on India”.
Adani Group has suspended work on a ₹34,900 crore petrochemical project at Mundra in Gujarat as it focuses on resources to consolidate operations and address investor concerns following a damning report by a US-based short seller, sources said. The group’s flagship Adani Enterprises Ltd (AEL) had in 2021 incorporated a wholly-owned subsidiary, Mundra Petrochem Ltd for setting up a greenfield coal-to-PVC plant at Adani Ports and Special Economic Zone (APSEZ) land in Kutch district of Gujarat.
But after Hindenburg Research’s January 24 report alleging accounting fraud, stock manipulations and other corporate governance lapses chopped off about USD 140 billion from the market value of Gautam Adani’s empire, the apples-to-airport group is hoping to claw back and calm jittery investors and lenders through a comeback strategy. The comeback strategy is based on addressing investor concerns around debt by repaying some loans, consolidating operations, and fighting off allegations.
The group has denied all allegations levelled by Hindenburg. As part of this, projects are being re-evaluated based on cash flow and finance available. And of the projects the group has decided not to pursue for the time being is the 1 million tonne per annum Green PVC project, two sources with knowledge of the matter said. The group has shot off mails to vendors and suppliers to “suspend all activities” on immediate basis, “till further notice.”-as seen the mails by PTI.
Reached for comments, a group spokesperson said AEL will be evaluating the status of growth projects in primary industry vertical over the coming months.
PVC is the world’s third-most widely produced synthetic polymer of plastic. It finds wide applications – from flooring, to making sewage pipes and other pipe applications, in insulation on electrical wires, packaging and manufacture of aprons etc. Adani Group had planned the project as PVC demand in India at around 3.5 MTPA was growing at the rate of 7 per cent year-on-year. With near stagnant domestic production of PVC at 1.4 million tonnes, India is dependent on imports to keep pace with the demand.
The Hindenburg report had alleged “brazen stock manipulation and accounting fraud” and use of offshore shell companies to inflate stock prices. The group has denied all Hindenburg allegations, calling them “malicious”, “baseless” and a “calculated attack on India”.
As part of the comeback strategy, the group has cancelled a ₹7,000 crore coal plant purchase as well as shelved plans to bid for stake in power trader PTC to conserve expenses. It has repaid some debt and pre-paid some of the finances raised by pledging promoter stake in group companies.
