Adani group, an Evil corp?

[blr_p]

What % of your investments have you put in?

I know people who have and regretted not getting in earlier.

 

[karanssh]

Don’t Bet Against India

New Delhi’s brewing economic comeback.

www.foreignaffairs.com

this is paywalled, mind sharing a non paywalled link?

 

[eternoMind]

What % of your investments have you put in?

C'mon Eddy, what's with this 'gotcha' kind of post

But if the retail investor's wealth is the primary concern of this thread, I'd say Adani is in a much better position than something such as, say, Reliance Power.

I'd even go so far as to say now that they've become this big, they fall into the category of 'too big to fail' companies, ala the Korean Cheabols.

And I'm not a stocks guy (prefer the passiveness of MF investing) but all friends who are, continue to remain bullish on Adani.

 

[BOZX]

The freefloat of ADANIENT is much less than any other company, was the primary reason for higher price demand vs supply. same way it went down fast too.
Also retail is not invested there in huge numbers. institutions are the primary investors. FII Still holds the largest chunk, Even after such panic situation.
Next Earnings date is 3rd of May, Let it come and whoever want to do fresh investment can make descission based on the outcome. Can check out how they faired after such drastic rout in the market.
I think if the company is robust then same news can't bring the company to down everytime. After June it will do better... hopefully.

 

[cellar_door]

Imagine spending your free time defending a mutlibillion dollar corporation cause they are bankrolling a political party that you like.

Either one of those things would be sad as hell as a stand alone. Put together? I cant even.... lol

 

[Kilroyquasar]

I would not rule out legal action in the future by Adani against Hindenberg. You are presuming guilt on the basis of allegations

not been following this much but had heard that adani corp has/is going to take it up legally against the 'hindon river' firm (in America or India, dont know). but the only 2 out of the 20 companies which have been targetted earlier by the firm and who pursued this legally in the US (except for ebix who is pursuing it in India & Hindenberg has not made any appearance here yet), one of them being India's 'Eros Intl' & the other a Chinese infra company, failed to make the case against the firm as in both the instances the latter was let-off by US courts saying that there were no legit legal grounds there as the firm had submitted that its reports were its "mere opinions" & not factual findings/allegations (taking cover behind "we think/we believe" kind-of wordplay). how would adani's case stand then? remains to be seen..

 

[eternoMind]

Imagine spending your free time defending a mutlibillion dollar corporation cause they are bankrolling a political party that you like.

Either one of those things would be sad as hell as a stand alone. Put together? I cant even.... lol

Not at all, most of the things we do on this forum can be classified as an 'unproductive spend of time'. No need to feel sorry for anyone.

To borrow a line from Ted Lasso, it helps to be curious, not judgmental. I've learned much more since adopting that attitude, instead of seeing things in black and white and rushing to judgments.

 

[superczar]

Yet why is no legal action being taken against Adani? where is the fraud where is the crime? My point is that some external entity knows nothing about what happens here.

A far more pertinent question to ask would be when would Adani seek legal action against Hindenburg.

Since the hypothesis here is that the Gov is on cohorts with the group then not much can be expected on that front in India. So this anyway ties up with what you would expect if said hypothesis is true.

However, if the allegations in the report are indeed false, you can bet that the group would challenge these allegations and present proof that demonstrates otherwise.
This simple act would not only destroy Hindenburg, it would make the market valuation of the group companies jump up massively - maybe even to as much as what they were in December 2022.

The Adani group has every possible , and incredibly large incentive to challenge Hindenburg with clear proof.
And this should be very straightforward if the books are indeed clean.

So the million dollar, no make that 100 billion dollar question is - when and if this would happen.

 

[eternoMind]

not been following this much but had heard that adani corp has/is going to take it up legally against the 'hindon river' firm (in America or India, dont know). but the only 2 out of the 20 companies which have been targetted earlier by the firm and who pursued this legally in the US (except for ebix who is pursuing it in India & Hindenberg has not made any appearance here yet), one of them being India's 'Eros Intl' & the other a Chinese infra company, failed to make the case against the firm as in both the instances the latter was let-off by US courts saying that there were no legit legal grounds there as the firm had submitted that its reports were its "mere opinions" & not factual findings/allegations (taking cover behind "we think/we believe" kind-of wordplay). how would adani's case stand then? remains to be seen..

Adani handled this very poorly from a PR point of view. I don't see any way for them to tide over this except to actually tide over this.

 

[Kilroyquasar]

Yet why is no legal action being taken against Adani? where is the fraud where is the crime? My point is that some external entity knows nothing about what happens here.

this is a good writeup here (but viewable only under a payplan):

Was Adani stock rise really a con? GoI’s ex-CEA & IMF’s Executive Director, India, argues a plausible explanation for the high market valuation was a combination of public capital spending and irrational exuberance

GoI has agreed to the Supreme Court’s suggestion for a committee to study the Adani episode. The committee will have to contend with Hindenburg’s report which called Adani Enterprises “the biggest con in history”. Does...

timesofindia.indiatimes.com

 

[JMP]

This should have resulted in a 30% return on capital, which is not bad for large capital.

Could you please elaborate on how the return would be 30%?
I have been trying to figure out how they made money off of this, there are some vague claims of creating a single product derivative of our indices in news articles, but haven't found anything concrete yet.

 

[eternoMind]

A far more pertinent question to ask would be when would Adani seek legal action against Hindenburg.

Since the hypothesis here is that the Gov is on cohorts with the group then not much can be expected on that front in India. So this anyway ties up with what you would expect if said hypothesis is true.

However, if the allegations in the report are indeed false, you can bet that the group would challenge these allegations and present proof that demonstrates otherwise.
This simple act would not only destroy Hindenburg, it would make the market valuation of the group companies jump up massively - maybe even to as much as what they were in December 2022.

The Adani group has every possible , and incredibly large incentive to challenge Hindenburg with clear proof.
And this should be very straightforward if the books are indeed clean.

So the million dollar, no make that 100 billion dollar question is - when and if this would happen.

You do realise this is a battle of PR, right? Not a legal battle where the court needs to be convinced of Adani's case, where the question of right or wrong comes in. Adani has already lost the perception battle with its poor handling of the allegations. They probably realise this. The group's value tanked on the basis of mere allegations. Would it make sense for them to pursue this further, given the perception hit they've already taken? Don't look at it from the right/wrong pov, but rather from the practicality pov.

 

[superczar]

You do realise this is a battle of PR, right? Not a legal battle where the court needs to be convinced of Adani's case, where the question of right or wrong comes in. Adani has already lost the perception battle with its poor handling of the allegations. They probably realise this. The group's value tanked on the basis of mere allegations. Would it make sense for them to pursue this further, given the perception hit they've already taken? Don't look at it from the right/wrong pov, but rather from the practicality pov.

No, the PR battle is being fought in India for the perception in the general public’s mind.

The markets simply do not care much for PR ..
Retail investors may care for it to some extent but given the extremely low retail float of group shares (and the almost negligible contribution of B2C revenues), it is completely irrelevant in this particular case

 

[karanssh]

2. Adani group is real benefactor of current govt. and they know and leverage every loopholes in the system.

Adani group or any other major conglomerate will be friendly with all governments. He is spotted with leaders of all parties. Whichever way the wind blows, he will blow money there.

3. The exponentially growth of Adani group in the last 5-10 year without any major/visible business prospects.

I would not say that adani group has no major projects in last 5-10 years, they have massive portfolio companies. AWL is a house hold brand, and ACC cement which they acquired recently is massive too. They manage/own many airports in india, and also have many construction undertakings, limited to western part of the country.

 

[eternoMind]

No, the PR battle is being fought in India for the perception in the general public’s mind.

The markets simply do not care much for PR ..
Retail investors may care for it to some extent but given the extremely low retail float of group shares (and the almost negligible contribution of B2C revenues), it is completely irrelevant in this particular case

Disagree mate. The PR damage wiped off those billions off of Adani stocks. Institutional investors have largely stayed put and if not overtly supportive, haven't joined in the sell-off.

I also don't see Adani having any trouble raising more money locally. That support by banks and institutional investors such as LIC in itself acts as tacit backing of the govt (you can debate the merit of a govt doing so, but that'd be a different matter).

Given this situation, what incentive does Adani have in actively engaging with Hindenburg's allegations! That said, I'm sure this isn't the last we've heard on this. Adani will go after Hindenburg, but just not in the way we think it should right now.

 

[superczar]

Disagree mate. The PR damage wiped off those billions off of Adani stocks. Institutional investors have largely stayed put and if not overtly supportive, haven't joined in the sell-off.

I also don't see Adani having any trouble raising more money locally. That support by banks and institutional investors such as LIC in itself acts as tacit backing of the govt (you can debate the merit of a govt doing so, but that'd be a different matter).

Given this situation, what incentive does Adani have in actively engaging with Hindenburg's allegations! That said, I'm sure this isn't the last we've heard on this. Adani will go after Hindenburg, but just not in the way we think it should right now.

LOL , please go check the holding pattern for the group companies.
The retail investor stake - e.g. in the flagship group was 1.6% prior to the fiasco.

So per your argument , this 1.6% holding group got so spooked by just ineffective PR that they caused the entire market cap to drop by over 60% in a quarter?
How , even, ?

 

[TinTinSnowy]

Institutional investors have largely stayed put and if not overtly supportive, haven't joined in the sell-off.

They cannot offload large quantity in most Adani companies right now. No buyers for such large quantities in Adani Total Gas, Adani Transmission, Adani Green and Adani Power. You can check the volume during this fiasco and the quantity large institutions are holding.

Take Adani Total Gas for example. As per the shareholding pattern ending December 2022 quarter, LIC holds 6,55,88,170 shares or 5.96 per cent stake in the company. 9,46,950 is the average per day volume for last 20 days. It will be difficult to sell in off-market even at discount right now. So they are pretty much stuck for now.

So per your argument , this 1.6% holding group got so spooked by just ineffective PR that they caused the entire market cap to drop by over 60% in a quarter?

Haha! I guess we will see many surprises in the next shareholding pattern.

 

[eternoMind]

LOL , please go check the holding pattern for the group companies.
The retail investor stake - e.g. in the flagship group was 1.6% prior to the fiasco.

So per your argument , this 1.6% holding group got so spooked by just ineffective PR that they caused the entire market cap to drop by over 60% in a quarter?
How , even, ?

Not sure how this segued into what caused the fall when I was referring to what, why, and how Adani's response to Hindenburg needs to be, especially as you consider that as the litmus test of the former's integrity.

In Dec '22 for Adani Ent, FPIs owned a tad over 15% with DIIs at 5-6% and slightly over 2% with individuals. FPIs sold en masse while DIIs and individuals have largely remained put. DII support (possibly with tacit govt approval) will and has helped stabilise things. Given this, what incentive does Adani have in taking the fight to Hindenburg?

 

[TinTinSnowy]

However, if the allegations in the report are indeed false, you can bet that the group would challenge these allegations and present proof that demonstrates otherwise.
This simple act would not only destroy Hindenburg, it would make the market valuation of the group companies jump up massively - maybe even to as much as what they were in December 2022.

Indeed. If the allegations were false they would have not wasted a single day to take legal action, sue Hindenburg and many others and restore confidence.

 

[eternoMind]

They cannot offload large quantity in most Adani companies right now. No buyers for such large quantities in Adani Total Gas, Adani Transmission, Adani Green and Adani Power. You can check the volume during this fiasco and the quantity large institutions are holding.

Take Adani Total Gas for example. As per the shareholding pattern ending December 2022 quarter, LIC holds 6,55,88,170 shares or 5.96 per cent stake in the company. 9,46,950 is the average per day volume for last 20 days. It will be difficult to sell in off-market even at discount right now. So they are pretty much stuck for now.

This is the tacit support I'm referring to. Not that this govt is a stooge of Adani/Ambani, rather the govt is using them towards it strategic ends. Which is a plausible enough reason for not ascribing entirely altruistic motives to Hindenburg's shorting. Question everyone and everything.