Analysing the Adani Scenario through Upcoming Projects and Market News

Adani Group has been under a scanner by numerous organisations due to the recent claims of Fraud from the Hindenburg Research Group. The group has made a detailed report against the Adani group and taken a short position in the Adani group shares. The group has accused the Adani Group of fraud, stock manipulation and wrong profits or self created net profits on the balance sheet to cheat the investors. However the group on the other hand has denied all these allegations. But still many firms like Citigroup, Morgan Stanley have backed the Hindenburg report and taken a decision to not allow the Adani Shares to be kept as collateral anymore against the loans. This made the investors panic and thus the share valuation of the firm deteriorated further. 

Currently all the Adani Group shares have lost 100 Billion dollar in valuation combined and this has caused a major distrust amidst the investor’s community against the group. However the local banks like SBi wo has the biggest exposure against the group has claimed that it has no fear of losing the money as the company has assigned many assets as collateral in case any downfall happens. During the FPO as well when the report flawed the Adani group’s image the biggest insurer LIC doubled its position and many investment houses like Reliance, Mittal came to aid the group for fulfilling its FPO. However due to devaluation of the share prices and being way below the FPO price the company withdrew the FPO.

Adani Group and Project

Due to all such devaluation multiple major projects that are under the Adani Group are being reconsidered or at least put under scanner due to the fear of incompletion of the projects. Recently the company has won many major contracts.

The most recent deal and a game changer for the Adani group is the Dharavi Redevelopment project. The project has been spread across 300 hectares of land and is also the house of many people and the corporates as well. Hence if the project goes under the group will be highly criticised and many people would be affected as well.

Another such project that is in the news is the airport development at Navi Mumbai. The adani group is developing and expanding the entire Navi Mumbai Airport and hence it is under scanner as well being a high valued project. The last project that is under a huge scan is the electricity distribution expansion project to Navi Mumbai. This project is under limelight as it has been taken over by Gautam Adani from Anil Ambani.

Why are the Projects under Scanner ?

The projects of Adani group are under scanner due to the demand from Maharashtra Congress to dump the company from the Dharavi project and other projects related to their state. The Dharavi project alone is a 5069 Crore Rs project and includes 1 million plus people. On the other hand the costing of the airport development of Navi Mumbai is around 16700 Crore Rs. This has been taken over from GVK group by the conglomerate. 

On one hand the projects won by Adani Group are under scanner and on the other hand the company has been trying to fight the case against the allegations by appointing Watcheel legal firm. This is the same firm that was behind the Twitter case when Elon Musk took it over. 

Recent News

In the recent news despite the allegation the group has received clearance from NCLT for Adani Power and its projects. The Company also cracked a deal and took over Haifa Port of Israel. However the situation seems no one can deny the fact that the group is not worrying about the allegations and has been continuing the business operations as a daily routine. It has also been conducting multiple bids for projects and hence the share valuation of the firms are also into a volatile mode from the constant lower circuit days. 

The firm’s shares have been showing some recovery at times but however they are very low from their highs. The price recovery would take a huge amount of time as the group has been in the limelight of controversies since the report was published. Not only this the companies attached to the group are also facing a value loss. Forensic SBI shares have been falling devaluation due to the extra exposure it has towards the Adani Group.

Also the results published by the group claims a solid increase in the revenues and net profit of all the companies except Adani Power. The profit for the firm decreased by 96%. However the share price of other companies are witnessing a recovery since the company paid up a billion dollars to assure the banks about their loans and to stop them from liquidating the bonds offered by the company to take up the loans.