Still reeling from the impact of Hinderburg’s report and its allegations of corporate fraud, the Adani Group is reportedly stepping away from petrochemicals and is unlikely to proceed with the $4 billion greenfield project in Mundra, said a Bloomberg report.
The coal-to-polyvinyl chloride project was to have a production capacity of 2,000 KTPA (kilo tonne per annum) once completed. However, the report appears to have thrown a spanner into the works.
Apart from the said unit, Adani Group is expected to ease its ambitions of diving into aluminium, steel and road projects. Instead, the group will revert to its core projects viz. power generation, ports and green energy.
Previously, media reports claimed that the multi-billion dollar company had tapered its revenue growth to 15 per cent to 20 per cent for the next financial year, down from the earlier target of 40 per cent.
After the Hindenburg report came out, Adani and its affiliate companies have lost more than $125 billion in market value so far. The Hindenburg report accused the Adani group of stock manipulation and using tax havens whilst having unsustainable debt.
The idea behind managing the expectations regarding revenue growth was to rebuild investor confidence, reports added.
The development comes a day after Adani Group came out with a statement quashing another report claiming it had not repaid its loans against the promoter’s shares. Rubbishing the reports, the conglomerate said the report was ‘baseless’ and ‘deliberately mischievous’.
Adani Group CFO Jugeshinder Robbie Singh also took to Twitter to slam the report saying it speculated ‘outright lies’.
“Deliberate misrepresentation (and if i speculate out right lies) of @TheKenWeb ( @SudzzBTS an @nimishshp) they know that relevant exchanges will update end of quarter. The deliberate subterfuge will be clear to all once exchanges update the data post end of quarter,” tweeted the company CFO on Monday.
In the brutal fallout of Hindenburg’s report, investors dumped Adani shares while the company was forced to abandon a $2.5 billion share sale.
(With inputs from agencies)