Nov 28 (Reuters) - Adani Group's ports business will

invest an extra $1.2 billion in a long-delayed deep-sea facility

in India's southern state of Kerala, its local government said

on Thursday.

The deal comes after Adani Group's 10 listed companies saw

as much as $34 billion wiped off their total market value in the

wake of Chairman Gautam Adani's indictment last week by U.S.

authorities for his role in an alleged bribery scheme.

Adani Group has dismissed the allegations as "baseless".

Vizhinjam, at India's southern tip, is strategically

important due to its proximity to international shipping routes

and will help it compete with Dubai, Singapore and Sri Lanka.

The agreement draws a line under long-standing arbitration

initiated by the state port authorities against Adani Ports for

a five-year delay in completing the project's first phase.

Trial operations of the first phase of the project, which

had a capacity of 1 million TEU (twenty-foot equivalent), began

in July, and full-scale commercial operations are expected to

begin next month, officials said earlier.

Kerala Chief Minister Pinarayi Vijayan said in a post on X

that as the port's second and third phases near completion by

2028, it will see an investment of $1.2 billion which will

expand the capacity of the facility to 3 million TEU.

Adani Ports, which is part of billionaire Gautam Adani's

conglomerate, aimed to start operations in 2018 but faced delays

due to land acquisition problems as local people protested

against the port, which they said would lead to coastal erosion.

($1 = 84.4480 Indian rupees)