Adani Group has suspended work on a Rs 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\u2019s 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\u2019s 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\u2019s 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 cashflow 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 \u201csuspend all activities\u201d on immediate basis. In the mails, seen by PTI, the group has asked them to \u201csuspend all activities of the scope of work and performance of all obligations\u201d for Mundra Petrochem Ltd\u2019s Green PVC project \u201ctill further notice. This is the following \u201cunforeseen scenario\u201d. The management, it said, was \u201cre-evaluating various project\/s being implemented at group level in different business verticals. Based on future cash flow and finance, some of the project\/s are being re-evaluated for its continuation and revision in the timeline.\u201d Reached for comments, a group spokesperson said AEL will be evaluating the status of growth projects in the primary industry verticals over the coming months. \u201cThe balance sheet of each of our independent portfolio companies is very strong. We have industry-leading project development and execution capabilities, strong corporate governance, secure assets, and strong cash flows, and our business plan is fully funded. We remain focused on executing our previously outlined strategy to create value for our stakeholders,\u201d the spokesperson said. \u201cAEL will be evaluating the status of growth projects in the primary industry vertical over the coming months\u201d.
The unit was to have a poly-vinyl-chloride (PVC) production capacity of 2,000 KTPA (kilo tonne per annum) requiring 3.1 million tonnes per annum (MTPA) of coal that was to be imported from Australia, Russia and other countries.
PVC is the world\u2019s third-most widely produced synthetic polymer of plastic. It finds wide applications \u2013 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 \u201cbrazen stock manipulation and accounting fraud\u201d and the use of offshore shell companies to inflate stock prices. The group has denied all Hindenburg allegations, calling them \u201cmalicious\u201d, \u201cbaseless\u201d and a \u201ccalculated attack on India\u201d.
As part of the comeback strategy, the group has cancelled a Rs 7,000 crore coal plant purchase as well as shelved plans to bid for a stake in power trader PTC to conserve expenses. It has repaid some debt and pre-paid some of the finances raised by pledging promoter stakes in group companies.<\/p>\n","protected":false},"excerpt":{"rendered":"
Adani Group has suspended work on a Rs 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\u2019s flagship Adani Enterprises Ltd (AEL) had in 2021 incorporated a wholly-owned subsidiary, Mundra Petrochem Ltd […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[667],"tags":[],"class_list":["post-335424","post","type-post","status-publish","format-standard","category-business"],"_links":{"self":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/335424","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/comments?post=335424"}],"version-history":[{"count":0,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/335424\/revisions"}],"wp:attachment":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/media?parent=335424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/categories?post=335424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/tags?post=335424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}