Double trouble hits Adani | Can conglomerate brush controversy under rug?

The Parliament, for two consecutive days, has been witnessing 'Adani, Adani' chants from the Opposition during Prime Minister Narendra Modi's speech in the Lok Sabha and the Rajya Sabha. The claims made by Congress, like the 'magical' rise of Gautam Adani in the richest persons' list from 609 in 2014 to No. 2 in 2022 in the BJP regime, are unsubstantiated, with former party President Rahul Gandhi unable to present any proof for the same. However, Adani cannot trapeze on politics, as troubles for the Group continue to rise across India. 

Double trouble for Adani? 

Earlier this week, in Uttar Pradesh, Madhyanchal Vidyut Vitran Nigam Ltd (MVVNL) cancelled a Rs 5,454 crore worth tender for the supply and operation of about 79 lakh smart prepaid electricity meters, in which Adani Group was said to be the lowest bidder. 

UP Power Consumer Council chairperson Avadhesh Verma, who had complained of “high cost”, noted that “…even the lowest bids, like by the Adani Group in Madhyanchal Vidyut Vitran Nigam Ltd or those in Dakshinanchal, Purvanchal, and Pashimanchal, are 48 per cent to 65 per cent higher than Rs 6,000 per meter set under the standard guidelines by the regulatory authority." 

On the other hand, in Himachal Pradesh, the Excise and Taxation Department inspected an Adani Group company, scrutinising records and checking the stock at the Adani Wilmar warehouse in Parwanoo. The department was apparently investigating possible Goods and Services Tax violations by the company, a 50:50 joint venture between the Adani conglomerate and Singapore-based Wilmar.

Questions remain unanswered 

The development comes while the Adani Group finds itself in the middle of a political row at the Centre, triggered by a scathing report by US-based short-seller Hindenburg Research.

Has Adani been able to give satisfactory responses to Hindenburg’s questions? No, as per the short-seller. Even though Adani Enterprises came out with quite a lengthy response to Hindenburg’s allegations, the short seller says Adani failed to “specifically answer 62 of our 88 questions.”

With questions yet to be answered, the stock market seems to be affected. After index provider MSCI said it will conduct a free-float review of the conglomerate's securities, Adani stocks were once again under selling pressure on Thursday. The worst affected in Adani's 10-pack stock was its flagship entity Adani Enterprise which nosedived 238.55 points, or 11.02 percent over the day to end at Rs 1,925.70.