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Hindenburg fallout: Adani Group suspends work on Rs 34,900 crore petrochemical project – Times of India


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NEW DELHI: Adani Group has suspended work on a Rs 34,900 crore petrochemical venture at Mundra in Gujarat because it focuses on sources to consolidate operations and handle investor issues following a damning report by a US-based quick vendor, sources mentioned.
The group’s flagship Adani Enterprises Ltd (AEL) had in 2021 included a wholly-owned subsidiary, Mundra Petrochem Ltd for establishing a greenfield coal-to-PVC plant at Adani Ports and Particular Financial Zone (APSEZ) land in Kutch district of Gujarat.
However after Hindenburg Analysis’s January 24 report alleging accounting fraud, inventory manipulations and different company governance lapses chopped off about $140 billion from the market worth of Gautam Adani’s empire, the apples-to-airport group is hoping to claw again and calm jittery traders and lenders via a comeback technique.
The comeback technique relies on addressing investor issues round debt by repaying some loans, consolidating operations, and preventing off allegations.
The group has denied all allegations levelled by Hindenburg. As a part of this, initiatives are being re-evaluated primarily based on cashflow and finance accessible.
And of the initiatives the group has determined to not pursue in the intervening time is the 1 million tonne every year Inexperienced PVC venture, two sources with information of the matter mentioned.
The group has shot off mails to distributors and suppliers to “droop all actions” on quick foundation.
Within the mails, seen by PTI, the group has requested them to “droop all actions of the scope of labor and efficiency of all obligations” for Mundra Petrochem Ltd’s Inexperienced PVC venture “until additional discover.”
That is the next “unexpected state of affairs”. The administration, it mentioned, was “re-evaluating varied venture/s being applied at group stage in several enterprise verticals. Primarily based on future cashflow and finance, a number of the venture/s are being re-evaluated for its continuation and revision in timeline.”
Reached for feedback, a bunch spokesperson mentioned AEL will likely be evaluating the standing of development initiatives in main {industry} vertical over the approaching months.
“The steadiness sheet of every of our impartial portfolio corporations may be very robust. We’ve got industry-leading venture improvement and execution capabilities, robust company governance, safe belongings, robust cashflows, and our marketing strategy is totally funded. We stay targeted on executing our beforehand outlined technique to create worth for our stakeholders,” the spokesperson mentioned.
“AEL will likely be evaluating the standing of development initiatives within the main {industry} vertical over the approaching months”.
The unit was to have a poly-vinyl-chloride (PVC) manufacturing capability of two,000 KTPA (kilo tonne every year) requiring 3.1 million tonne every year (MTPA) of coal that was to be imported from Australia, Russia and different international locations.
PVC is the world’s third-most extensively produced artificial polymer of plastic. It finds large functions – from flooring, to creating sewage pipes and different pipe functions, in insulation on electrical wires, packaging and manufacture of aprons and many others.
Adani Group had deliberate the venture as PVC demand in India at round 3.5 MTPA was rising on the price of seven per cent year-on-year. With close to stagnant home manufacturing of PVC at 1.4 million tonne, India relies on imports to maintain tempo with the demand.
The Hindenburg report had alleged “brazen inventory manipulation and accounting fraud” and use of offshore shell corporations to inflate inventory costs. The group has denied all Hindenburg allegations, calling them “malicious”, “baseless” and a “calculated assault on India”.
As a part of the comeback technique, the group has cancelled a Rs 7,000 crore coal plant buy in addition to shelved plans to bid for stake in energy dealer PTC to preserve bills. It has repaid some debt and pre-paid a number of the funds raised by pledging promoter stake in group corporations.

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