Adani Group Market Cap Hits USD 200 Billion as Coal Allegations Refuted

Adani Group's market capitalisation witnessed a significant rebound, crossing the USD 200 billion (Rs 16.9 lakh crore) threshold on Wednesday. This resurgence was marked by an impressive gain of Rs 11,300 crore in a single day, as investors showed renewed confidence in the conglomerate, dismissing concerns over alleged misconduct in coal supply to a Tamil Nadu power company. Over the last two trading sessions, the group's market value surged by Rs 56,250 crore, according to stock exchange data.

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The financial uplift for Adani Group coincided with a report by the Financial Times, which referenced documents from the George Soros-supported Organized Crime and Corruption Reporting Project (OCCRP). The report suggested potential fraud by the Adani Group in 2013, accusing it of selling low-grade coal as high-value fuel. Despite these allegations, Adani Group firmly denied any wrongdoing. The controversy stirred political debates, with opposition leaders, including former Congress president Rahul Gandhi, calling for an investigation by a joint parliamentary committee.

A spokesperson for Adani Group clarified that the coal's quality was rigorously tested at various stages by independent agencies, including customs authorities and officials from Tamil Nadu Generation and Distribution Company (Tangedco). The comprehensive testing process confirmed that the allegations of supplying low-quality coal were unfounded and misleading. Furthermore, the spokesperson highlighted that payment terms were strictly linked to the coal's quality, as verified through these tests.

Addressing specific claims made in the Financial Times report, the spokesperson noted discrepancies regarding the vessel used for shipping coal in December 2013. The group clarified that this vessel had not been employed for transporting coal from Indonesia until February 2014. The allegations were deemed speculative, focusing unjustly on price differences without considering the fixed-price contract's terms.

The group also responded to references about a Directorate of Revenue Intelligence (DRI) inquiry concerning overvaluation of Indonesian coal imports. Adani stated that it had complied with all requests for information from the DRI over four years ago and had not received further communication or objections since then.

In terms of procurement practices, Adani Global Pte Ltd was defended for its stringent criteria in selecting coal suppliers, emphasizing the importance of credibility and experience to avoid contractual breaches and safeguard its reputation.

Despite these allegations, Adani Group's stock performance remained unaffected. Deven Choksey, managing director of DRChoksey FInserv, remarked on the market's discerning nature and its ability to assess situations critically. He expressed optimism about the fundamental strength of Adani Group companies and projected robust growth by 2034.

Over the past year, Adani Group's market capitalisation has outperformed broader market indices, with a 56.6 per cent increase compared to Nifty's 23.3 per cent gain during the same period. This resilience underscores investor confidence and reflects positively on the conglomerate's financial health and operational integrity.