After the Hindenburg fallout due to a report on January 24 that wiped out $140 billion from the market value of Gautam Adani’s empire, the Adani Group has suspended their work on the Rs 34,900 crore petchem project at Mundra in Gujarat.
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’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 the 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 $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 tonnes 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 an immediate basis.
According to a report from Bloomberg, Adani’s Mundra Power Plant is under the scanner with a $1 billion debt.
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