Adani Group stopped work on a 34,900 crore petrochemical project in Mundra, Gujarat, India, as it focused on resources to strengthen operations and handle investor concerns following a negative report by a US-based short seller. As a result, the group has paused for the time being on the green PVC (Polyvinyl Chloride) project, which includes a production capacity of 1 million tonnes per year. Adani Enterprises Ltd (AEL), the flagship company of the Adani Group, proposed to execute the coal-to-PVC complex in April 2021; the project expects to produce PVC grades, including suspension PVC resin and CPVC.

PVC is the third primary commodity produced to satisfy the global demand as a synthetic polymer and holds uses such as flooring, sewage pipes, electrical wire insulation, packaging, and other competitive industries. Meanwhile, Adani Group planned the project to reduce the import dependency for PVC consumption in the Indian Market. Therefore, the unit will be needed 3.1 Million Tonnes Per Annum (MTPA) of coal to produce PVC, and to meet the coal requirement is expected to be imported from Australia, Russia, and other nations.

However, the Hindenburg report alleged the company of “deliberate stock manipulation and accounting fraud,” along with the use of offshore shell businesses to boost stock values. The group has denied all these claims calling them a calculated and baseless attack on India. In addition, the company has halted the 7k cost plant procurement and postponed plans to bid for a stake in power trader PTC India Ltd as part of its comeback strategy. Thus, the group has ordered vendors and suppliers to suspend all activities and performance of all obligations for Petrochem’s green PVC project at Mundra (Gujarat) till further notice in mid-March 2023.

On the price discussions of PVC in India, the PVC price movement has not witnessed significant fluctuations owing to the modest downstream demand and sufficient production in the week ending 17 March 2023. As per the Chemanalyst, PVC demands are likely to be boosted by the seasonal consumption in the Indian market affecting the commodity pricing dynamics in late March 2023.