On Wednesday, the market capitalization of Adani Group crossed the USD 200 billion threshold, or Rs 16.9 lakh crore, as investors restored faith in the company’s denial of any wrongdoing in the coal supply to the Tamil Nadu power corporation, resulting in gains of Rs 11,300 crore for its listed enterprises.
According to stock exchange data, the company that supplies apples to airports increased its market capitalization by Rs 56,250 crore in the last two trading sessions, with a gain of Rs 11,300 crore on Wednesday.
The profit was realized on the same day as the London-based Financial Times hinted at an Adani group scam in 2013 by marketing low-grade coal as high-value fuel, using records from the George Soros-backed Organized Crime and Corruption Reporting Project (OCCRP).
Despite the Adani group’s denial of all the accusations, opposition figures, such as former Congress president Rahul Gandhi, used the news item to call for a joint parliamentary committee investigation into the purported misconduct.
According to a representative for the organization, the coal’s purity was checked by independent testers both during the loading and unloading process and by representatives of the Tamil Nadu Generation and Distribution Company (Tangedco) and customs authorities. “With the supplied coal having passed such an elaborate quality check process by multiple agencies at multiple points, clearly the allegation of supply of low-quality coal is not only baseless and unfair but completely absurd.”
The representative added that tests for the quality of the questioned consignment had produced findings within allowable bounds. “Moreover, the payment is dependent on the quality of coal supplied, which is determined through the testing process,” the spokesman stated.
The report continued by stating that, prior to February 2014, the ship mentioned in the report as having transported coal from Indonesia had not been used for coal transportation.
“The accusations are unfounded guesswork and assumptions that are based solely on the disparity between the FOB and CIF prices of coal, projecting it to the supply of low gross calorific value (GCV) coal.
The order of supply was a fixed price contract, meaning the provider would bear both the upside and the downside, thus not only are the two prices not comparable, but the procurement price itself is also irrelevant,” it stated.
The report continued by stating that, prior to February 2014, the ship mentioned in the report as having transported coal from Indonesia had not been used for coal transportation.
“The accusations are unfounded guesswork and assumptions that are based solely on the disparity between the FOB and CIF prices of coal, projecting it to the supply of low gross calorific value (GCV) coal.
The order of supply was a fixed price contract, meaning the provider would bear both the upside and the downside, thus not only are the two prices not comparable, but the procurement price itself is also irrelevant,” it stated.
The group described the report to the DRI inquiry as a rehash of previous charges.
It added that 40 businesses were the target of an investigation investigating claims that Indonesian coal imports were overvalued. “More than four years ago, the Adani firms provided the DRI with the information they requested. The DRI hasn’t requested any further documents since then. Additionally, the DRI has not expressed any shortcomings or objections.”
Regarding claims that intermediaries were engaged in the transaction, the group stated, “Adani Global Pte Ltd sources coal from individuals, businesses, and merchants who meet the necessary qualifications and experience requirements. This is due to the fact that Adani’s supplier reputation and finances could suffer if contractual obligations are not fulfilled.”
It seems that the study had no effect on the stocks of the Adani group.
“The markets are now comparatively more intelligent. Before making a decision, they consider the whole context,” DR. Choksey FInserv managing director Deven Choksey stated. “In my point of view, fundamentals of Adani group companies are far stronger than what they were in 2014 and the group will emerge even stronger in 2034.”
Over the last year, the market capitalization of the group has risen by 56.6%, surpassing the gains of the Nifty, the wider market, which has increased by 23.3%.
(The Business Standard staff may have edited this report’s headline and picture; the remaining content is automatically produced from a syndicated feed.)
