Indian Markets Dismiss Coal Invoicing Allegations Against Adani Group by FT, OCCRP

Adani Group shares recovered by market close on Wednesday, following a news report alleging that the conglomerate had supplied low-grade coal as higher-quality coal to a state-owned power generation company a decade ago.

The Adani Group’s market capitalization surged past the USD 200 billion mark (Rs 16.9 lakh crore) on Wednesday, with its listed firms gaining Rs 11,300 crore in market value. This rise demonstrates strong investor confidence in the conglomerate, which has firmly denied any wrongdoing in its coal supply transactions with Tamil Nadu’s power company.

The Rs 11,300 crore gain on Wednesday contributed to a total increase of Rs 56,250 crore in the group’s market capitalization over the last two trading sessions, according to stock exchange data.

Adani Enterprises, the group’s flagship company, hit a low of Rs 3,075 during the day but closed 0.61 percent higher at Rs 3,134.75. Adani Ports ended at Rs 1,377.90, down 0.54 percent from its day’s low of Rs 1,364.35. Adani Total Gas finished 0.47 percent higher at Rs 934.55, while Adani Energy Solutions advanced 2.33 percent. Adani Power rose 1.68 percent, and Adani Green Energy added 0.14 percent.

The recovery came despite a report by the Financial Times, citing the Organized Crime and Corruption Reporting Project (OCCRP), which claimed that in January 2014, the Adani Group bought ‘low-grade’ coal from an Indonesian company at an alleged cost of $28 a tonne. The report alleged that this shipment was then sold to the Tamil Nadu Generation and Distribution Company (TANGEDCO) as high-quality coal for an average price of $91.91 per metric tonne.

Despite these claims, the market has seemingly dismissed the report, as evidenced by the continued rise in Adani Group’s stock value.

Over the past year, the group’s market capitalization has surged by 56.6 percent, significantly outperforming the broader market Nifty, which gained 23.3 percent in the same period. This consistent growth indicates strong investor faith in Adani Group companies, despite recurrent negative media reports. This is the third instance where foreign media platforms have published adverse reports about the group.

The Adani Group has denied all allegations and questioned the timing of the latest report, suggesting it was strategically released during India’s general elections. The accusations are based on coal supply transactions from 2012-13, a period when the UPA government was in power. The market seems to interpret this as an external attempt to influence Indian voters.

Opposition leaders, including Mahua Moitra of the All India Trinamool Congress and Jairam Ramesh of the Congress, have used the report to call for a Joint Parliamentary Committee probe into the alleged misconduct. However, the resilience and strength shown by Adani Group stocks suggest that investors remain unaffected by these allegations and continue to support the conglomerate.

The unwavering rise in Adani Group’s market value underscores a robust investor confidence, undeterred by the controversies surrounding the group. As the general elections unfold, the group’s performance will be closely watched, both in the stock market and the political arena.