Business tycoon Gautam Adani, who had overtaken Mukesh Ambani to become richest man of India, is now sailing through troubled waters. Hindenburg report that was recently released opened Pandora’s box for him.
Adani Group, in the report, was accused of manipulating market and accounting fraud. One thing led to another and days after the revelations were made in the report, questions are lurking over the future of key projects in the city which are helmed by Adani’s firm—The Dharavi Redevelopment Project, the Navi Mumbai International Airport and the plans to expand the electricity distribution business in Navi Mumbai which was touted to be next boom after the airport and Mumbai Trans Harbour Link.
A report in Hindustan Times quoted a top state government official saying that the developments in the matter is being watched closely and so is the progress of project. The official said that the projects that are yet to commence or are underway may be delayed because of the controversy.
Maharashtra Congress reportedly demanded that the state not go ahead with Adani for DRP and also monitor the progress of the airport after revelation by the Hindenburg report’s revelation and consequent fall in company’s valuation.
State Congress chief Nana Patole was quoted in the HT that homes and small businesses of millions of poor people in Dharavi are under a crisis and that the government should take the project from them.
Meanwhile, Varsha Gaikwad, MLA Dharavi said that the project and that it is unaffordable to have it halt midway and added that they CM Eknath Shinde and Deputy CM Devendra Fadnavis with their concerns.
Meanwhile, Shriram Subramanian, founder of InGovern Research Services, a corporate governance advisory firm, told HT that the large infrastructure projects will always be able to raise funding at a project level from financial and strategic investors. He also said Adani group already has a number of operating infrastructure assets in form of airports, power generation and distribution etc and that the cost of any new fund raise may increase marginally with time.
Airports in city operated by Adanis
The Adani Group also operate Mumbai International Airport and is building the Navi Mumbai airport at an estimated cost of Rs 16, 700 crores after taking project GVK group. Moreover, it included redevelopment of land adjacent to the airport.
Additionally, Adani Airports also wants to make commercial use of land which is presently occupied by Air India quarters. The future work also included turning T1 into cargo terminal.
The work on Navi Mumbai airport is on schedule presently, a top CIDCO official said that work and that there’s no certainty about the future but emphasized the work needs to be completed by December 31, 2024. He said that they don’t expect any delays when quizzed about the concerns continual fund for airport.
Meanwhile, the spokesperson from Adani Airports said that the FPO situation hasn’t had impact on current operations and future plans of the company and expressed confidence on timely execution and delivery of projects.
Adani Power distribution
The conglomerate also has several other projects and they have forayed into power distribution in the suburbs of Mumbai. The group took over electricity distribution in city’s suburbs and Mira Bhayandar region from Anil Ambani-led Reliance.
Ambani in 2022 applied for license to distribute power in Thane and Navi Mumbai as well but his take over was met with opposition from state-run electricity distribution company employees who also went on strike to protest privatisation.
An official from the Maharashtra Electricity Regulatory Commission was quoted saying that they will call for the firm’s credit worthiness while evaluation and that the staff is doing their due diligence.
CEO of Adani Electricity also said that the stock’s crash will not impact their working.
Though the conglomerate has several other projects especially those related to real estate, the third key development which has come under scanner after this week’s developments is the company’s foray into power distribution outside the Western suburbs.
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