Hindenburg fallout: Adani Group stops work on Rs 34,900-cr petchem project

Protesters burn an effigy of Adani and PM Modi. File pic/AFP

Adani Group has suspended work on the R34,900 crore petrochemical project 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 in 2021 incorporated a wholly owned subsidiary, Mundra Petrochem Ltd, for setting up a greenfield coal-to-PVC plant 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 $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.

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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 it 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.

In the mails, seen by PTI, the group has asked them to "suspend all activities of the scope of work and performance of all obligations" for Mundra Petrochem Ltd's Green PVC project "till further notice." Reached for comments, a group spokesperson said, "AEL will be evaluating the status of growth projects in the primary industry vertical over the coming months."

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