Adani Enterprises falls 3.5% as Gautam Adani-led group suspends work on Rs 34,900 crore petrochemical project in Gujarat

March 21,2023

Adani Enterprises share price dropped nearly 3.5 per cent on Monday, March 20, after billionaire Gautam Adani-led conglomerate suspended work on a major petrochemical project in Gujarat’s Mundra. The Adani Group wants to focus on resources to consolidate operations and address investor concerns following a damning report by a US-based short seller, news agency PTI said in a report citing sources.

At 10.40 AM IST, Adani Enterprises shares quoted at Rs 1802.95 each, down 3.92 per cent on NSE. The scrip, however, has surged 1.21 per cent in the last five trading sessions.

Adani Enterprises Ltd. (AEL), the group's flagship company, has established a wholly-owned subsidiary in 2021 called Mundra Petrochem Ltd to build a greenfield coal-to-PVC facility on Adani Ports and Special Economic Zone (APSEZ) property in Gujarat's Kutch area.

However, the group is attempting to recover and reassure uneasy investors and lenders through a comeback strategy after Hindenburg Research's report on January 24 alleging accounting fraud, stock manipulation, and other corporate governance lapses reduced the market value of Gautam Adani's empire by about $140 billion.

The group has denied all allegations levelled by Hindenburg. As part of this, projects are being re-evaluated based on cash flow and finance available.

Meanwhile, according to an exchange filing, Adani Group's two companies -- Adani Green Energy and NDTV -- are supposed to move to the first stage of the long-term additional surveillance measures (ASM) framework.

The parameters for shortlisting securities under the ASM framework include high-low variation, client concentration, number of price band hits, close-to-close price variation, and price-earnings ratio.