Gautam Adani's 3 mega projects under scanner in Mumbai after Hindenburg's fraud claims. 10 points
2 min read . Updated: 03 Feb 2023, 07:01 AM IST
Premium- Future of the Dharavi Redevelopment Project (DRP); the Navi Mumbai International Airport, and the plans to expand the electricity distribution business to Navi Mumbai hangs in air
- Once ranked No. 2 among the world’s wealthiest, Gautam Adani has tumbled to No. 21 on the Bloomberg Billionaires Index
Billionaire Gautam Adani is battling the worst crisis of his corporate life after US short-seller Hindemburg's bold claims eroded his wealth. The Adani Group has shed $108 billion in market value since Hindenburg Research accused it of stock manipulation and accounting fraud in a 24 January report. Adani’s rebuttal had failed to reassure investors. Once ranked No. 2 among the world’s wealthiest, he has tumbled to No. 21 on the Bloomberg Billionaires Index.
Questions are being raised about the future of multi-billion projects helmed by Gautam Adani's companies. In the financial capital Mumbai, Gautam Adani is sitting on three key projects, including the Dharavi Redevelopment Project (DRP) on 300 hectares of prime land; the Navi Mumbai International Airport, and the plans to expand the electricity distribution business to Navi Mumbai, which the billionaire took over from Anil Ambani in 2018.
Adani's projects in Mumbai:
- A top official told Hindustan Times, Livemint's sister publication the projects that are under implementation may get delayed due to ongoing turmoil because of the Hindenburg's allegations. The Maharashtra government was scheduled to sign the memorandum of understanding with Adani this month but that is unlikely to continue, the official said under anonymity.
- Meanwhile, the Maharashtra Congress has demanded that the state needs to dump the company from DRP and also take a hard look at the ongoing construction of the Navi international airport.
- Last year in December, Adani Realty won a tender to redevelop the Dharavi slums with a bid of ₹5,069 crore. The project involves the rehabilitation of one million inhabitants of Dharavi including 60,000 residential and 13,000 commercial dwellers and redevelop 240 hectares of prime land in the heart of Mumbai over 17 years.
- Apart from the DRP project, the Adani conglomerate operates Mumbai international airport and is involved in the construction of Navi Mumbai international airport at an estimated cost of ₹16,700 crore. The project was taken over from the GVK group by Adani Airports. It also includes the redevelopment of land adjoining the airport.
- Further, Adani Airport Holdings Ltd also aims to make commercial utilization of the land which is at present occupied by Air India quarters and hangars at Kalina in the city’s western suburbs.
- The future work includes turning the old terminal (T1) into a cargo terminal with entire passenger operations shifting to Terminal 2. Besides, the removal of slums on the airport land may require further cash infusion.
- Though Adani has other projects related to real estate in the city, what has come under scanner after Hindenburg's report is the company’s foray into power distribution outside the Western suburbs.
- In 2018, Adani Power Limited took over the electricity distribution in Mumbai suburban and Mira Bhayander from Anil Ambani-led Reliance. The energy distribution business was a profit-making venture for Anil Ambani.
- In 2022, Adani Electricity Mumbai Limited decided to expand its footprint beyond the Mumbai suburbs and applied for a distribution license for Navi Mumbai and Thane.
- Adani’s offer to take over the power distribution network there has met with stiff opposition from the employees of the state-owned electricity company. At present, the Maharashtra Electricity Regulatory commission is looking into the proposal. However, Kandarp Patel, CEO of Adani Electricity Mumbai Limited said that the rout of the Adani shares will have no impact on their work.
