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Adani Group mcap regains USD 200 billion mark as company rebuts coal invoicing claims

The gain came on a day when London-based Financial Times, citing documents from George Soros-backed Organized Crime and Corruption Reporting Project (OCCRP) in a report alluded to fraud by the Adani group by selling low-grade coal as high-value fuel in 2013.

Edited By: Arushi Jaiswal @JaiswalArushi Mumbai Updated on: May 23, 2024 7:54 IST
Adani group, coal invoicing allegations
Image Source : ANI Representative Image

Mumbai: Adani Group's market capitalisation on Wednesday surpassed the USD 200 billion mark (Rs 16.9 lakh crore) as its listed firms saw an increase of Rs 11,300 crore. This rise occurred as investors showed renewed confidence in the company, which has denied any wrongdoing in the supply of coal to the Tamil Nadu power company.

With a gain of Rs 11,300 crore on Wednesday, the Adani Group, an apples-to-airport conglomerate, has increased its market capitalisation by Rs 56,250 crore over the last two trading sessions, according to stock exchange data.

The gain occurred on a day when the London-based Financial Times, citing documents from the George Soros-backed Organized Crime and Corruption Reporting Project (OCCRP), reported allegations of fraud by the Adani Group, claiming they sold low-grade coal as high-value fuel in 2013.

'Completely absurd'

While Adani group denied all allegations, the news report was cited by opposition leaders including former Congress president Rahul Gandhi to demand a probe by a joint parliamentary committee into the alleged wrongdoing.

A spokesperson for the group stated that the quality of the coal underwent independent testing at the point of loading and discharge, as well as by customs authorities and officials from 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."

"Moreover, the payment is dependent on the quality of coal supplied, which is determined through the testing process," the spokesperson said, adding tests for the quality of the consignment in question had yielded results within permissible limits.

It further clarified that the vessel mentioned in the report to have carried the coal in December 2013 had actually not been used for shipping coal from Indonesia until February 2014. "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," it said.

The group dismissed the references in the report to a Directorate of Revenue Intelligence (DRI) inquiry as a rehash of old allegations.

It said that the inquiry into allegations of over valuation of Indonesian coal imports was initiated against 40 companies. "The Adani companies furnished details sought by the DRI more than four years ago. Thereafter, the DRI has not asked for further documents. Nor has the DRI communicated any deficiency or objection."

Adani Group on allegations of middlemen being involved in deal

On allegations of middlemen being involved in the deal, 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 apparently had no impact on Adani group stocks. "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, the group's market capitalisation has surged by 56.6 per cent, outpacing the broader market index Nifty, which has recorded a gain of 23.3 per cent over the same period.

(With PTI inputs)

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