Adani Group mcap reclaims the $200 billion threshold as it refutes allegations of coal billing

Mumbai: Adani Group’s listed companies experienced a gain of Rs 11,300 crore on Wednesday, pushing the group’s market capitalization above the USD 200 billion (Rs 16.9 lakh crore) barrier. The firm, which has denied any impropriety in the delivery of coal to the Tamil Nadu power provider, saw a surge in investor confidence at the same time.

The apples-to-airport conglomerate Adani Group saw a gain of Rs 11,300 crore on Wednesday, bringing its market capitalization up by Rs 56,250 crore over the previous two trading days, as per stock exchange statistics.

The profit came about on a day when the Adani Group was accused of fraud by the London-based Financial Times, which was reporting on records from the George Soros-backed Organized Crime and Corruption Reporting Project (OCCRP), stating that in 2013 the company had marketed low-grade coal as high-value fuel.

“Absolutely ridiculous”
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 alleged misconduct.

According to a group spokesman, independent testing was done on the coal’s purity at the loading and unloading points, as well as by customs officers and representatives of the Tamil Nadu Generation and Distribution Company (TANGEDCO).

“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 said that tests on the quality of the disputed consignment had produced findings that were within allowable bounds. “Moreover, the payment is dependent on the quality of coal supplied, which is determined through the testing process,” the spokesman stated.

It also made clear that, contrary to the story, the ship that was supposed to transport coal from Indonesia in December 2013 had not been put to service for coal shipping until February 2014. “The accusations are unfounded guesswork and assumptions that are based only 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 said.

The organization disregarded the report’s allusions to a Directorate of Revenue Intelligence (DRI) investigation as a repetition of previously made accusations.

It said 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 papers since then. Additionally, the DRI has not expressed any shortcomings or objections.”

Adani Group regarding claims that intermediaries were engaged in the transaction
Regarding claims that intermediaries were engaged in the transaction, the organization said, “Adani Global Pte Ltd obtains coal from individuals, businesses, and merchants that meet the necessary qualifications and experience requirements. This is due to the fact that Adani’s supplier reputation and finances might suffer if contractual commitments 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,” DRChoksey FInserv managing director Deven Choksey said. “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.”

The group’s market capitalization has increased by 56.6 percent in the last year, surpassing the growth of 23.3 percent for the Nifty, a wider market indicator.