Adani Group Stock exchange data indicated that the apples-to-airport conglomerate earned Rs 56,250 crore in market capitalization in the last two trading sessions, including a rise of Rs 11,300 crore on Wednesday.
On Wednesday, the market capitalization of Adani Group crossed the USD 200 billion threshold, or Rs 16.9 lakh crore, as investors restored faith in the company’s denial of any wrongdoing in the coal supply to the Tamil Nadu power corporation, resulting in gains of Rs 11,300 crore for its listed enterprises.
According to stock exchange data, the company that supplies apples to airports increased its market capitalization by Rs 56,250 crore in the last two trading sessions, with a gain of Rs 11,300 crore on Wednesday.
The profit was realized on the same day as the London-based Financial Times hinted at an Adani group scam in 2013 by marketing low-grade coal as high-value fuel, using records from the George Soros-backed Organized Crime and Corruption Reporting Project (OCCRP).
Despite the Adani group’s denial of all the accusations, opposition figures, such as former Congress president Rahul Gandhi, used the news item to call for a joint parliamentary committee investigation into the purported misconduct.
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A spokesperson for the group said the quality of the coal was independently tested at the point of loading and discharge, as well as 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.”
“Moreover, the payment is dependent on the quality of coal supplied, which is determined through the testing process,” the spokesperson said, adding tests for quality of consignment in question had yielded results within permissible limits.
It went on to state that the vessel cited in the report to have carried the coal in December 2013 had in fact 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,” it said.
The group termed as rehash of old allegations references in the report to DRI enquiry.
The inquiry into allegations of over valuation of Indonesia coal imports, it said, 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-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.”
In the past one year, the group’s market capitalization has increased by 56.6 per cent outperforming the broader market Nifty, which has gained 23.3 per cent during the same period.
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