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Adani Enterprises Ltd incorporated Mundra Petrochem Ltd in 2021 to establish a greenfield coal-to-PVC plant at Adani Ports and SEZ Land in Gujarat.

The sources said Adani group had suspended work on its ₹34.900 crore petrochemical project in Gujarat’s Mundra as it focuses resources on consolidating operations and addressing investor concerns.

The group’s flagship Adani Enterprises Limited (AEL) has awarded a wholly owned subsidiary, Mundra Petrochem Limited, to install a greenfield coal-to-PVC plant on the land of Adani Ports and Special Economic Zone (APSEZ). ) in the Kutch district of Gujarat by 2021.

But after a Jan. 24 report by Hindenburg Research alleging accounting fraud, stock manipulation and other corporate governance lapses slashed nearly $140 billion from Gautam Adani’s empire’s market value ( MV), the airport-apple conglomerate has made a comeback. And has calmed nervous investors Do Lenders through a return strategy.

The restructuring strategy is based on allaying investor concerns about debt by paying off part of the debt, consolidating operations and fighting charges.

The group denied all of the accusations made by Hindenburg. As part of this, projects are being reassessed based on cash flows and available financing.

Two origins with knowledge of the point said one of the projects the group has elected not to pursue for the time being is a 1mt/y green PVC project.

The group has emailed vendors and suppliers, asking them to “suspend all activities” immediately.

In the email seen by PTI, the group has asked them to suspend all scope of work activities and compliance with all obligations for Mundra Petrochem Ltd’s green PVC project “until further notice.”

This is the following “unexpected scenario.” Management said it “was reassessing several projects that were being implemented at the group level in different business verticals. Based on future cash flows and financials, some projects are being reassessed for continuation and timeline review.”

Asking for comment, a spokesman for the group said AEL would assess the status of development projects in the primary industry in the coming months.

“Each autonomous portfolio company in our group has very solid financial standing. Our business plan is fully funded, and we have excellent corporate governance, secure assets, and industry-leading project development and execution capabilities. To create value for our stakeholders, we are committed to implementing the previously described measures, “added the spokeswoman.

“AEL will assess the status of development projects in primary industry verticals in the coming months.”

The facility was designed to have a 2,000 ktpa (kilotonnes per year) polyvinyl chloride (PVC) manufacturing capability, necessitating the importation of 3.1 MTPA (million tonnes per annum) of coal from Australia, Russia, and other nations.

PVC plastic is the third most-produced synthetic polymer in the world. It has many uses, from flooring, sewage pipe fabrication and other piping applications, to electrical wire insulation, gaskets and fabrication aprons, etc.

Adani Group had planned the project as PVC demand in India of around 3.5 MTPA was growing at 7 percent year on year. With domestic PVC production almost stagnant at 1.4 million tons, India depends on imports to keep pace with demand.

The use of foreign shell firms and “blatant stock manipulation and accounting fraud” to artificially raise stock values were both alleged in the Hindenburg Report. All of Hindenburg’s charges have been denied by the organization, which has referred to them as “malicious,” “baseless,” and a “calculated attack on India.”

As part of the backtracking strategy, the group canceled the purchase of a ₹7,000 crore coal-fired plant and plans to bid for a stake in energy trader PTC to save expenses. It has repaid part of the debt obtained by promising the promoter’s participation in the group companies and has paid part of the financing in advance.

Scarlet Samson

Adani Enterprises has decided to abandon a plan to acquire a coal-fired power plant with an estimated $847m investment, in what is likely an indication of a slowdown in the conglomerate’s spending power in the wake of its decision to acquire a coal mine in Australia from GVK that was holding a massive $1.5bn (£945m) debt.

Gautam Adani’s electricity unit is halting an $847mn acquisition of a coal-fired power station in India, indicating that the billionaire’s business empire is slowing down spending following a short seller attack.

A group of Indian tycoons, including India’s largest private thermal power producer, has been hit by a stock market crash triggered by New York-based short seller Hindenburg Research, which published a report accusing the group of stock manipulation and fraud.

Adani has vehemently denied the allegations and has demanded that the group’s debt is manageable. But it has failed to arrest its bond yield rise and fall in listed company shares, with flagship Adani Enterprises falling from a high of over Rs 4,000 in December to a low of Rs 1,017.

“Now Adani Power is simply halting or temporarily halting any further capital expansion,” said energy economist Vibhuti Garg, director of South Asia at the Institute for Energy Economics and Financial Analysis. “Any new investment will come under great scrutiny.”

The Adani Group didn’t respond to a request for comment when asked if they are also avoiding building up coal assets. Garg added that this might be the case.

Widely regarded as an ally of India’s Prime Minister Narendra Modi, Adani portrays himself as the architect of the logistics network and power generation that formed the backbone of India’s growing economy. He and his allies were, in the words of a former Indian minister, the “engine and fuel” of the Modi government’s economic success.

A reduction would be a change of strategy for the 60-year-old man, who built up his conglomerate very quickly during a debt-fuelled expansion. He added revenues by buying or building new projects like solar power or airports.

Adani Power in August settled to buy DB Power. This company owns and runs a good coal-fired power plant in the Indian state of Chhattisgarh, and its parent company Diligent Power Private. Diliigent’s owners also run a newspaper business, the Bhaskar Group.

The Rs70bn ($847mn) cash deal, approved by India’s competition regulator in September, had an end-of-October deadline for completion, which the companies then extended four times.

On Wednesday, the latest deadline for the deal to be finalized, Adani Power said it was no longer extending the time limit, as the company needed to focus on other projects. In other words, the deal was effectively dead.

The company’s stock market filing stated that the long stop date under the memorandum of understanding from August 18th, 2022, has expired.

The companies mentioned in the announcement were Adani Ports and Special Economic Zone, Adani Power, and Adani Enterprises. These companies mentioned that they would be scaling back their capital expenditure for the financial year starting in April.

“We will not make new commitments ’til we settle this volatility period,” said Adani Group chief financial officer Jugeshinder Singh on an analyst call after Adani Enterprises’ quarterly earnings on Tuesday.

One of the main reasons for the failure of the development was the inability to meet deadlines. The developers were faced with multiple deadlines along the way, with the latest being the final deadline for the airport’s construction.

The project was never able to meet the deadline, and the city was forced to pull the plug. However, after the collapse of the construction of an airport near the city of Lucknow, the government has upped the ante by insisting that current projects would be completed on schedule and offering to bus in analysts and investors to check its progress.

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According to allegations of fraud against the Adani group, which have caused an unheard-of stock market selloff, Finance Minister Nirmala Sitharaman stated on Saturday that the Government would let authorities do their job.

The stock market regulator, the Securities and Exchange Board of India (SEBI), is already probing the allegations. The group denied it inflated profit, and SEBI has already clarified the matter. “The Government will permit the regulators to carry out their jobs,” Sitharaman continued. The Government doesn’t need to issue any statements.” Sitharaman has already stated that the Government anticipates law enforcement authorities to have a role in fraud cases.

“Regulators will do their job. Reserve Bank commented on this yesterday. And earlier, banks and LIC came forward with their risk appetite. So regulators will do their job.” Ms. Sitharaman said at a press meeting in Mumbai.

Additionally, the regulatory bodies are free to take whatever steps are required to maintain the integrity of the regulated markets and are not subject to governmental oversight. SEBI (Securities and Exchange Board of India) has the tools necessary to preserve those ideal conditions, according to the speaker.

The finance minister also dismissed questions on the cancellation of a new share sale by the Adani group in the wake of the fall in the stock, saying: “How many times have FPOs (monitored public offers) withdrawn from this country? And how many The bar did.” Has the image been removed? Has India suffered because of this? And how many times have FPOs yet to return?

His statement came after US-based short seller Hindenburg Research, which bets on falling stocks, accused the Adani group of tax haven abuse and stock manipulation last week, expressing concern. Due to high debt level.

The group has refuted the accusations, claiming that the claim that short sellers are manipulating the stock has “no validity” and is based on a misunderstanding of Indian law.

Facing allegations of rigging share prices, Adani Group said the allegations are baseless and without any basis. “The claims are unfounded and untrue, the group claimed. “He continued, “The Adani Group is a law-abiding business, and its various entities have always followed fully all applicable laws and regulations.”

The group alleges to have manipulated its shares to create panic in the market with “false and baseless” news. The Government of India has also rejected the allegations. “The Government will do its job. The regulators will do their job. They will look into all these issues. I am sure the Adani group will also look into everything,” Economic Affairs Secretary Subhash Chandra Garg told reporters.

The shares of seven traded Adani Group firms have lost more than $100 billion, or roughly half of their market value, due to the Hindenburg report.

The Reserve Bank of India (RBI) said in a statement cited by the finance minister that despite worries about risks to Indian banks, the nation’s banking sector is still robust and stable. Shares of Adani are declining.

“Positive signs can see in the indices for sufficient capital, asset quality, liquidity, coverage of provisions, and profitability. The bank also complies with the macro risk framework’s standards “. Central.

RBI has issued a statement saying it remains vigilant and continues monitoring the stability of the Indian banking sector. He did not specifically mention the Adani group.

The opposition has attacked the Government and called for a parliamentary discussion and an investigation into the accusations against the energy ports organization.

In a series of tweets, the finance minister said: “Government is aware of the investigation regarding Adani Group promoters and is closely following the developments. Regulators will do their job. The Government will take necessary action if anything wrong find.”,

Scarlet Samson