Adani Group's market capitalisation reached £157.48 billion (£1.49 billion) on Wednesday as its listed firms gained £106.62 million. This follows the company's denial of any wrongdoing in supplying coal to a Tamil Nadu power company.
With the £106.62 million gain on Wednesday, the conglomerate has increased its market capitalisation by £531.39 million over the last two trading sessions, according to stock exchange data.
The rise in market value coincided with a report by the Financial Times, citing documents from the George Soros-backed Organized Crime and Corruption Reporting Project (OCCRP). The report suggested fraud by Adani Group in selling low-grade coal as high-value fuel in 2013.
The Adani Group denied all allegations. India's Opposition leaders, including former Congress president Rahul Gandhi, cited the report to demand a probe by a joint parliamentary committee.
A spokesperson for the group stated that the quality of the coal was independently tested at various points, including loading and discharge, 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, "Moreover, the payment is dependent on the quality of coal supplied, which is determined through the testing process." Tests for the quality of the consignment in question had yielded results within permissible limits.
The group also stated that the vessel mentioned in the report, which allegedly carried the coal in December 2013, had not been used for shipping coal from Indonesia before 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," the spokesperson said.
The group called the references in the report to the Directorate of Revenue Intelligence (DRI) inquiry a rehash of old allegations. The inquiry into allegations of overvaluation 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."
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-fulfillment of contractual obligations has financial and reputational implications for Adani as a supplier."
The report seemingly had no impact on Adani Group stocks. "The markets have become relatively smarter. They weigh the quantum of the situation before giving their judgment," 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."
In the past year, the group's market capitalisation has increased by 56.6 percent, outperforming the broader market Nifty, which gained 23.3 percent during the same period.
(PTI)
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