Friday marked one month of the Hindenburg report that led to a massive wipe-out of more than ₹ 12 lakh crores in the market capitalization of the Adani Group. Following the report, the Adani Group lost its alpha seat on the Indian stock exchanges as many of its shares hit back-to-back lower circuits.
Hindenburg Research is an American short seller that published a report alleging the Adani Group of stock manipulation and accounting fraud over the course of decades. This sent the conglomerate’s share price crashing, along with a fall in the broader markets.
The Adani group raised funds on various instances to increase CAPEX. However, it announced the prepayment of some of its debts amid the issues caused by the Hindenburg report.
France’s Total Energies SE in June 2022, announced an agreement to acquire a 25% stake in Adani New Industries Ltd. for the production and commercialisation of green hydrogen in India. Adani New Industries is a subsidiary of Adani Enterprises.
Patrick Pouyanne, Total Energies’ chief executive said that the deal is “on-hold”.
The France-based company has paused the USD 4 billion investment in the green hydrogen venture until the Adani group’s pending audits. According to reports, the pause in this deal will likely impact India’s green hydrogen target and its ecosystem.
The government had allocated ₹ 20,000 crores in January and had set a target of producing 5 million metric tonnes (MMT) of green hydrogen annually by 2030, which is scalable to 10 MMT annually.
Adani Enterprises had planned a ₹ 20,000 crore FPO, which talked about its plan to invest USD 50 billion in the next 10 years to create a green hydrogen ecosystem with a production capacity of 3 MMT annually alone by Adani New Industries Ltd. This FPO was called off due to the issue.
While there are other big players like L&T, Reliance Industries, NTPC Renewable Energy, and Indian Oil Corporation, who have announced strategic partnerships for research and technology development in the sector, the Adani Group was the first to come up with an overall investment plan and production numbers it is aiming for.
India is one of the largest consumers of hydrogen in the world, accounting for 6% to 7% of the world’s consumption. However, most of this is grey hydrogen and it costs around ₹160 to ₹220 per kg. However, green hydrogen, a better alternative, costs around ₹ 300 to ₹ 350 per kg. Adani aims to cut the cost of green hydrogen by a third.
“We can’t say there is no impact. There will be some impact on it (green hydrogen targets). Every company goes through a rough patch, but it (Adani) is not the only player that has announced investments and there are others (companies),” according to a government official.
Meanwhile, Jugeshinder Singh, Adani group CFO, said that Adani New Industries has an MoU and it was going through its normal due diligence phase, and this process might get completed in the next two to three months or the next six months. However, the company is continuing its development programme.
Written by Simran Bafna
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