Introduction
Adani Exports Limited started as a commodity trading company in 1988 and expanded into importing and exporting multiple commodities. With a capital of ₹5 lakhs, the company was established as a partnership firm with the flagship company Adani Enterprises, previously Adani Exports. In 1990, the Adani Group developed its own port in Mundra to provide a base for its trading operations. It began construction at Mundra in 1995. In 1998, it became the top net foreign exchange earner for India Inc. The company began coal trading in 1999, followed by a joint venture in edible oil refining in 2000 with the formation of Adani Wilmar.
Adani handled 4 Mt of cargo at Mundra in 2002, becoming the largest private port in India. Later in 2006, the company became the largest coal importer in India with 11 Mt of coal handling. The company expanded its business in 2008, purchasing Bunyu Mine in Indonesia which has 180 Mt of coal reserves. In 2009 the firm began generating 330 MW of thermal power. It also built an edible oil refining capacity in India of 2.2 Mt per annum.
In 2010, Adani group with help of Petronet LNG will setup a solid cargo port through a Joint Venture company namely Adani Petronet (Dahej) Port Private Ltd., has already commenced its Phase 1 operations from August 2010 at Dahej Port. solid cargo port terminal would have facilities to import/export bulk products like coal, steel and fertilizer. PLL has 26% equity in this JV.
The Adani group became India's largest private coal mining company after Adani Enterprises won the Orissa mine rights in 2010. Operations at the Port of Dahej commenced in 2011 and its capacity subsequently grew to 20 Mt. The company also bought Galilee Basin mine in Australia with 10.4 gigatonnes (Gt) of coal reserves. More than 60 percent of the Adani Group's revenue is derived from coal-related businesses.
In 2011, the Adani group also bought Abbot Point port in Australia with 50 Mt of handling capacity. It commissioned India's largest solar power plant with a capacity 40 MW. As the firm achieved 3,960 MW capacity, it became the largest private sector thermal power producer in India. In 2012 The company shifted its focus on three business clusters – resources, logistics and energy.
Adani Power emerged as India's largest private power producer in 2014. Adani Power's total installed capacity then stood at 9,280 MW. On 16 May of the same year, Adani Ports acquired Dhamra Port on East coast of India for ₹5,500 crore (equivalent to ₹88 billion or US$1.1 billion in 2023). Dhamra Port was a 50:50 joint venture between Tata Steel and L&T Infrastructure Development Projects, which has been acquired by Adani Ports. The port began operations in May 2011 and handled a total cargo of 14.3 Mt in 2013–14.With the acquisition of Dhamra Port, the Group is planning to increase its capacity to over 200 Mt by 2020.
In 2015, the Adani Group's Adani Renewable Energy Park signed a pact with the Rajasthan Government for a 50:50 joint venture to set up India's largest solar park with a capacity of 10,000 MW.[36] In November 2015, the Adani group began construction at the port in Vizhinjam, Kerala.[37]
Adani Aero Defence signed a pact with the Israeli arms manufacturer, Elbit-ISTAR, and Alpha Design Technologies to work in the field of Unmanned Aircraft Systems (UAS) in India in 2016. In April, Adani Enterprises secured approval from the Government of Gujarat to begin work on building a solar power equipment plant. In September, Adani Green Energy (Tamil Nadu), the renewable wing of the Adani Group, began operations in Kamuthi in Ramanathapuram, Tamil Nadu with a capacity of 648 MW at an estimated cost of ₹4,550 crore (equivalent to ₹65 billion or US$820 million in 2023).In the same month, the Adani Group inaugurated a 648 MW single-location solar power plant. It was the world's largest solar power plant at the time it was set up.
On 22 December 2017, the Adani Group acquired the power arm of Reliance Infrastructure for ₹18,800 crore (US$2.89 billion).
In October 2019, French oil and gas company TotalEnergies bought a 37.4% stake in Adani Gas for ₹6,155 crore (US$874.04 million) and obtained joint control of the company. Total also invested US$510 million in a subsidiary of Adani Green Energy in February 2020.
In August 2020, Adani Group obtained a majority stake in Mumbai and Navi Mumbai airports after entering a debt acquisition agreement with GVK Group. Through a concession agreement with the Airports Authority of India, Adani Group also obtained a 50-year lease on Ahmedabad, Guwahati, Jaipur, Lucknow, Mangalore and Thiruvananthapuram airports.
In May 2021, Adani Green Energy acquired SB Energy, a joint venture of SoftBank Group and Bharti Enterprises, for US$3.5 billion.
In May 2022, the Adani Group acquired Ambuja Cements and ACC for $10.5 billion. The deal will make the Adani Group the second largest cement maker in India.
In May 2022, UAE-based conglomerate International Holding Company (IHC), headed by Syed Basar Shueb, invested US$2 billion in three Adani Group companies, namely Adani Green Energy, Adani Transmission and Adani Enterprises. In June 2022, TotalEnergies acquired a 25% stake in Adani New Industries, the newly formed green hydrogen subsidiary of Adani Enterprises, for US$12.5 billion.
Coal mining in Australia
The Adani Group launched in 2014, with the support of a part of the Australian Government and Queensland, a mining and rail project (Carmichael coal mine) in Carmichael in Queensland's Galilee Basin for $21.5 billion over the life of the project, i.e. 60 years. This mine is one of many coal mines in Queensland, Australia. Its annual capacity would be 10 Mt of thermal coal.
This project will occupy an area of 35,000 hectares (86,000 acres). In response to activist pressure some international banks refused to finance it, and in November 2018, Adani Australia announced that the Carmichael project would be 100% financed by Adani Group resources. In July 2019, the project received its final approvals from the Australian Government and construction of the mine commenced.
The Australian Government has been taken to the Federal Court of Australia by the Australian Conservation Foundation twice, once in 2018 and once in March 2020 (still ongoing as of September 2020), relating to its contravention and alleged contravention of the Environment Protection and Biodiversity Conservation Act 1999 with respect to the impact of the Carmichael mine on groundwater and the country's water resources.
In 2020, Adani Mining changed its name to Bravus Mining and Resources.
On 29 December 2021, Bravus announced that the first shipment of high-quality coal from the Carmichael mine had been assembled at the North Queensland Export Terminal (NQXT) in Bowen ready for export as planned.
Cronyism
Chairman and MD Gautam Adani has been described as being close to former Chief Minister of Gujarat and Indian Prime Minister Narendra Modi and his ruling Bharatiya Janata Party (BJP). This has led to allegations of cronyism as his firms have won many Indian energy and infrastructure government contracts. In 2012, an Indian government auditor accused Modi of giving low cost fuel from a Gujarat state-run gas company to the Adani group and other companies. In Jharkhand, the BJP-led state government made an exception to its energy policy for Adani's Godda power plant. Both the Adani Group and Modi's government have denied allegations of cronyism.
The Modi government extended an extraordinary favour to Gautam Adani in order to promote his coal business. Although the Modi government had ascertained that a particular regulation handing over coal blocks to the private sector was ‘inappropriate’ and lacked transparency, the government made an exception. It allowed Adani Enterprises Limited to mine from a block holding more than 450 million tonnes of coal in one of India’s densest forest patches.
Stock market rigging
In 2007, the Securities and Exchange Board of India (SEBI) prohibited multiple Adani companies from engaging in the purchase or sale of securities for a period of two years. This action was taken due to their involvement in a manipulation scheme that occurred between 1999 and 2001 to artificially influence stock prices. This manipulation was carried out through entities overseen by Ketan Parekh, the stockbroker who was the main accused in India’s biggest stock market scandal. After paying a fine of $140,000, the companies were eventually permitted to recommence their trading activities.
Stock manipulation and accounting fraud allegations
In January 2023, Hindenburg Research published the findings of a two-year investigation alleging that Adani had engaged in market manipulation and accounting malpractices. The report accused Adani of pulling "the largest con in corporate history" and "brazen stock manipulation and accounting fraud scheme over the course of decades". Hindenburg also disclosed that it was holding short positions on Adani Group companies. Bonds and shares of companies associated with Adani experienced a decline of more than $104 billion in market value after the accusations, representing approximately half of the market value. Hedge fund manager Bill Ackman said Hindenburg's Adani Report was "highly credible and extremely well researched." Adani denied the fraud allegations as without merit.On 29 January, Adani released a 413 page response to the Hindenburg report, calling Hindenburg’s conduct a "calculated securities fraud" and the report a "calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India." Hindenburg characterized the response as failing to engage with the issues raised by its initial report, and an exercise in obfuscation under the garb of nationalism. On 1 February, Adani cancelled its planned $2.5 billion (Rs 20,000 crore) Follow-on Public Offer (FPO) citing market volatility, and announced that it would return the FPO money to investors. Reserve Bank of India sought details from banks on exposure to Adani firms. Citigroup's wealth unit stopped extending margin loans to its clients against securities of Adani Group. Credit Suisse Group AG stopped accepting bonds of Adani Group companies as collateral for margin loans to its private banking clients. S&P Dow Jones Indices removed Adani Enterprises from its sustainability index.
On 2 March 2023, the Supreme Court of India formed a six-member committee to examine issues related to the Adani Group's stock crash after the Hindenburg report.On 19 May, on prima facie, the committee communicated its inability to conclude regarding the existence of a regulatory failure concerning the accusation of stock price manipulation by the group. This was primarily due to the insufficient information provided in the explanations by SEBI. Earlier on 29 April, SEBI requested a six-month extension to conclude its investigation, instead of the initially given two months provided on 2 March However, the Supreme Court granted a three-month extension and directed SEBI to complete the probe by 14 August 2023.
On 24 June, 2023, Adani Group's share value took a significant dive, following reports that United States Department of Justice and U.S. Securities and Exchange Commission were investigating the corporation's communications with its U.S.-based investors, spurred by a report from a short seller.
0 Comments