Hindenburg Effect: Adani Group suspends work on Rs 34,900 crore petchem project

The Adani Group has experienced significant losses following the release of a report by US short seller Hindenburg Research. Although there was a brief recovery in the shares of the group’s companies, Gautam Adani’s various projects have been severely impacted by the report. Recent reports indicate that work on the group’s petrochemical project in Mundra, Gujarat, valued at Rs 34,900 crore, has been suspended as a result.

According to the report, Adani Group is currently focused on strengthening the operations of the companies and addressing the concerns of the investors. In 2021, Adani Enterprises established a subsidiary called Mundra Petrochem Limited with the aim of constructing a coal-to-PVC plant on Adani Ports’ land in Kutch, Gujarat.

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Reports suggest that the group has decided not to go ahead with its 1 million tonne per annum green PVC project for the time being. News agency PTI reported on Sunday that the group has also sent an email to vendors and suppliers to stop all activities immediately. In the mail, the group has asked Mundra Petrochem Limited’s green PVC project to stop all activities till further notice.

Things have changed a lot for the Adani Group since the Hindenburg Research report came out on January 24. The report contained several severe allegations against the group, including accounting fraud and stock manipulation. After this, the combined market value of Adani Group companies plummeted to $140 billion. The Adani Group, involved in businesses ranging from apples to airports, is now trying to win back the trust of its investors. As a result, the group’s expansion plans have been adversely affected.

Adani Group’s comeback strategy is based on addressing debt concerns of investors. The group is working to fight off Hindenburg Research’s allegations by paying off some loans and consolidating operations. The group denied all allegations made by Hindenburg. Adani Group is re-evaluating its projects based on cash flow and available finance.