Adani Power is said to scrap $850 million coal plant purchase

Adani group

Adani Power Ltd. has called off its plan to acquire a coal plant project in central India, according to people familiar with the matter, as billionaire Gautam Adani looks to rein in spending and rebuild investor confidence in the wake of a bruising short seller report.

The Adani Group company and DB Power Ltd. mutually agreed not to proceed with the transaction after a long-stop date expired on Wednesday, said the people, who asked not to be identified as the information is private. DB Power operates a 1.2 gigawatt coal power project in the Indian state of Chhattisgarh.

In August, Adani Power agreed to take control of DB Power at an enterprise value of 70.2 billion rupees ($850 million). The acquisition was approved by the country’s competition regulator a month later.

Representatives for Adani Power and DB Power didn’t immediately respond to requests for comment.

The move comes after US short seller Hindenburg Research accused the Adani Group of market manipulation and accounting fraud, triggering turmoil in stocks and bonds of the conglomerate that wiped out more than $100 billion in value.

The Adani Group has halved its revenue growth target and plans to hold off fresh capital expenditure as parts of its efforts to win back the hearts of investors, Bloomberg News has reported.