Last Updated: March 19, 2023, 14:41 IST
Adani Enterprises Ltd had in 2021 included a wholly-owned subsidiary, Mundra Petrochem Ltd for organising a greenfield coal-to-PVC plant at APSEZ land in Kutch district of Gujarat.
And of the tasks the group has determined to not pursue in the meanwhile is the 1 million tonne each year Green PVC undertaking
Adani Group has suspended work on a Rs 34,900 crore petrochemical undertaking at Mundra in Gujarat because it focuses on assets to consolidate operations and deal with investor issues following a damning report by a US-based quick vendor, sources mentioned.
The group’s flagship Adani Enterprises Ltd (AEL) had in 2021 included a wholly-owned subsidiary, Mundra Petrochem Ltd for organising a greenfield coal-to-PVC plant at Adani Ports and Special Economic Zone (APSEZ) land in Kutch district of Gujarat.
But after Hindenburg Research’s January 24 report alleging accounting fraud, inventory manipulations and different company governance lapses chopped off about USD 140 billion from the market worth of Gautam Adani’s empire, the apples-to-airport group is hoping to claw again and calm jittery traders and lenders by way of a comeback technique.
The comeback technique relies on addressing investor issues round debt by repaying some loans, consolidating operations, and preventing off allegations.
The group has denied all allegations levelled by Hindenburg. As a part of this, tasks are being re-evaluated primarily based on cashflow and finance out there.
And of the tasks the group has determined to not pursue in the meanwhile is the 1 million tonne each year Green PVC undertaking, two sources with information of the matter mentioned.
The group has shot off mails to distributors and suppliers to “droop all actions” on immediate basis.
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 undertaking “until additional discover.” This is the following “unforeseen scenario”. The administration, it mentioned, was “re-evaluating numerous undertaking/s being applied at group stage in numerous  enterprise verticals. Based on future cashflow and finance, a number of the undertaking/s are being re-evaluated for its continuation and revision in timeline.” Reached for comments, a group spokesperson said AEL will be evaluating the status of growth projects in primary industry vertical over the coming months.
“The balance sheet of each of our independent portfolio companies is very strong. We have industry-leading project development and execution capabilities, strong corporate governance, secure assets, strong cashflows, and our business plan is fully funded. We remain focused on executing our previously outlined strategy to create value for our stakeholders,” the spokesperson mentioned.
“AEL will probably be evaluating the standing of development tasks within the major trade vertical over the approaching months”.
The unit was to have a poly-vinyl-chloride (PVC) production capacity of 2,000 KTPA (kilo tonne per annum) requiring 3.1 million tonne per annum (MTPA) of coal that was to be imported from Australia, Russia and other countries.
PVC is the world’s third-most widely produced synthetic polymer of plastic. It finds wide applications – from flooring, to making sewage pipes and other pipe applications, in insulation on electrical wires, packaging and manufacture of aprons etc.
Adani Group had planned the project as PVC demand in India at around 3.5 MTPA was growing at the rate of 7 per cent year-on-year. With near stagnant domestic production of PVC at 1.4 million tonne, India is dependent on imports to keep pace with the demand.
The Hindenburg report had alleged “brazen stock manipulation and accounting fraud” and use of offshore shell corporations to inflate inventory costs. The group has denied all Hindenburg allegations, calling them “malicious”, “baseless” and a “calculated assault on India”.
As part of the comeback strategy, the group has cancelled a Rs 7,000 crore coal plant purchase as well as shelved plans to bid for stake in power trader PTC to conserve expenses. It has repaid some debt and pre-paid some of the finances raised by pledging promoter stake in group companies.
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