Quick Read
- Market Cap Surge: Adani Group’s market capitalisation surpasses USD 200 billion (Rs 16.9 lakh crore).
- Investor Confidence: Gains of Rs 11,300 crore on Wednesday; total of Rs 56,250 crore increase in two trading sessions.
- Allegations: Financial Times report claims Adani sold low-grade coal as high-value fuel in 2013.
- Denial of Wrongdoing: Adani Group denies all allegations, emphasizing independent quality tests and compliance.
- Parliamentary Probe Demanded: Opposition leaders, including Rahul Gandhi, call for a joint parliamentary committee investigation.
- DRI Enquiry: Adani Group states they have provided all necessary details to the Directorate of Revenue Intelligence (DRI) regarding coal import valuations.
- Middlemen Clarification: Adani clarifies their sourcing practices, emphasizing the credentials and experience of their suppliers.
- Stock Market Impact: No adverse effect on Adani stocks; market fundamentals seen as strong.
- Performance: Adani Group’s market cap increased by 56.6% over the past year, outperforming the broader market Nifty’s 23.3% gain.
Adani Group Reaches $200 Billion Market Cap
Adani Group‘s market capitalisation surged past the USD 200 billion mark (Rs 16.9 lakh crore) on Wednesday after its listed firms saw a gain of Rs 11,300 crore, reflecting investor confidence amid allegations of misconduct in coal supply to a Tamil Nadu power company.
With the Rs 11,300 crore gain on Wednesday, the conglomerate’s market capitalisation has increased by Rs 56,250 crore over the past two trading sessions, according to stock exchange data.
The rise coincided with a report from the London-based Financial Times, citing documents from the George Soros-backed Organized Crime and Corruption Reporting Project (OCCRP), which suggested that Adani Group engaged in fraud by selling low-grade coal as high-value fuel in 2013.
Despite these allegations, which were also highlighted by opposition leaders like former Congress president Rahul Gandhi, who called for a parliamentary probe, Adani Group strongly denied any wrongdoing. A spokesperson for the group explained that the coal’s quality was independently tested at multiple stages, including by customs authorities and Tamil Nadu Generation and Distribution Company (Tangedco) officials. “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 spokesperson added that payments were dependent on the quality of coal supplied, which was determined through rigorous testing processes. They also clarified that the vessel mentioned in the report had not been used for shipping coal from Indonesia until February 2014, thus refuting the claims.
“The allegations are based only on the difference in the FOB and CIF price of coal, extrapolating it to the supply of low gross calorific value (GCV) coal, and are baseless conjectures and surmises. Not only are the two prices not comparable, but the procurement price itself is not relevant because the order of supply was a fixed price contract, with both the upside and downside to be borne by the supplier,” the group stated.
The report also referred to a DRI enquiry into the alleged overvaluation of Indonesian coal imports involving 40 companies, including Adani. The group emphasized that they had provided all requested details over four years ago, and the DRI had neither asked for additional documents nor communicated any deficiencies.
Addressing the involvement of middlemen, the group said, “Adani Global Pte Ltd sources coal from people/firms/traders having requisite credentials and experience. This is because non-fulfilment of contractual obligations has financial and reputational implications for Adani as a supplier.”
The report appeared to have no negative impact on Adani Group’s stock performance. “The markets have become relatively smarter. They weigh the quantum of the situation before giving their judgement,” said Deven Choksey, managing director of DRChoksey Finserv. “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 past year, Adani Group’s market capitalization has increased by 56.6%, outperforming the broader market Nifty, which has gained 23.3% in the same period.
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