TinTinSnowy
Adept
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.
Adani group, an Evil corp?
- Thread starter Pyception
- Start date
eternoMind
Skilled
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.
TinTinSnowy
Adept
GOI made this mistake. They let one person control all the major assets instead of distributing it between multiple Indian groups and companies. L&T, Tata, Birla, Reliance, JVs etc. I am glad the Adani bubble busted before it became a systematic risk. How long before one major heavily leveraged group goes down? Many of these assets get stuck in legal issues when the company holding them goes down while wasting those precious years of growth. Adani will become a roadblock in India's growth due to their debt position. Therefore we need multiple pvt, govt, joint venture companies handling these assets in a distributed manner.
Who will take action against him when the PM is his godfather/godbrother? I hope you are aware of what happen to a local analyst who tried to raise his voice before Hindenburg.
When will you extinguish the fire at your home? After everything is burned down?
Fair enough! They have hard assets. But most of these hard assets will be sold by the banks when he fails to make the debt repayment. These assets will be sold at book value or may be twice the book value. Not at any absurd equity valuations his stocks are trading at. Equity will get wiped out in such cases. Reliance Infra and Power also had hard assets. Promoters will siphon off funds, bank will take control of the assets and sell them and equity holders will get thenga!
Different Adani bonds are trading in international market. For example - https://www.boerse-frankfurt.de/bond/xs2383328932-adani-green-energy-ltd-4-375-21-24
A probable scenario which seems most fit to me is - He borrowed these bonds from bond holders and sold them in the market. Yield spooked up to 40% in few days after the report. He probably bought them back then and closed the trades. If I am correct he didn't stay more than 2 weeks in total in these trades. Few percentage probably went in transactions, forex and borrowing costs. Bond holders gets some interest for lending these bonds to him. Such products are very popular outside. Indian market does not have enough liquidity or interest for such products.
Estimating exact percentage will be difficult due to multiple factors especially bond maturity date. Real money was made in Adani Enterprises F&O positions. Options prices skyrocketed due to such price movement and increased volatility. 10-100x depending on strike prices. Pure futures short at 3K would have also made good money considering the current price is 1.7K.
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superczar
Skilled
Oh please.. Let Hindenburg or any other entity for that matter create a cooked up dossier on AAPL or Infy/Tata Motors for that matter.
Do you really believe it would create any kind of mass sell-off effect with any category of investors?
And let’s say hypothetically that it did due to a failure of the said firm’s PR dept, do you really think their CorpFin division won’t hit back with a massive lawsuit backed by supporting evidence to unambiguously disprove said allegations?
As things stand, its the inability to disprove the allegations that has caused this massive drop in market cap (as well as erode promoter and other shareholders‘ wealth) ..
What’s worse is it also severely impacts their ability to raise fresh capital for a huge list of WIP projects.
What more of an incentive could one possibly need?
Even worse, the paucity of available cashflows will end up having a severe negative impact on the ability of the firm’s ability to deliver on key projects , delays or holdups that end up impacting the country and its citizens like us rather negatively.
All of this could have very easily been avoided if our regulators and RFP decision makers would have done their due diligence - and perhaps raised a question (amongst many) on why on earth is a nearly 100 billion dollar firm being audited and certified by a circa 2017 passout from a hole-in-the-wall firm?
Sobirvs
Skilled
Imagine spending your free time attacking a multibillionaire just coz he is not bankrolling your corrupt political party. So let's attack and then one day he will come to the table, fund liberal campaigns and then we will keep quite like we keep quite for Tata's or apple's of the world. Imagine being this dumb either not understanding how the real world works or being trying to be cunning enough to think other people are naïve.
All left/lib should understand is, stop begging. If you are not being funded then may be making own money? Left and lib politicians are themselves bullish on adani. Supriya sulle, Supriya Shrinate all are invested in top stocks of adani and at the same time support shorting aswell as long as it gives them political gain.
eternoMind
Skilled
I was wondering about your binary thinking on this issue, as in who's right, who's wrong, why don't they prove themselves right et al! This assumption takes the Hindenburg report at face value and places the burden of proving them wrong on Adani. Nonsense, if you ask me. As is the doomsday predictions of Adani being unable to service its existing debt or the ability to raise new debt to fuel their expansion. All of these are based on nothing concrete, hence the scepticism of some of us.
Given the speculations, Adani's stock took a hammering and now that they're stabilising, it'd be a fool's errand to pursue this aggressively, especially given their initial PR faux pas. And they definitely shouldn't do it to 'prove people wrong'. The only way they can do that now is via performance, rock-solid performance. Overleveraged companies operating in sectors where projects have long gestation periods are always ripe for targeting by manipulators.
All Adani can do now is focus on its project execution skills and deliver numbers by reducing debt. No point in pursuing this Hindenburg thing further. That report was for the markets, and Adani needs to convince no one else other than the markets. And, of course, the government regulators if news reports are anything to go by. Given the amount of money Adani needs for its capex, I sure hope they pull through.
Come on now, let's not get nasty.
I grant some of the concerns are valid because of how the UPA allowed the unchecked expansion of such infra projects/companies back in their regime and how their going bust affected our growth story. But I don't buy the Hindenburg job on Adani, especially given the incentives, timing, and geopolitics involved.
TinTinSnowy
Adept
Adani group is hitting new 52 week low every day on cumulative basis. Not sure how it's stabilizing.
superczar
Skilled
A) While most things in life are gray - including the supposed backing for said corporate by the gov - and we can argue endlessly about them without either you or I being wrong.
However certain things are indeed binary and non negotiable.
- A medical doctor violating the hippocratic oath
- A civil engineer accepting a bribe to certify a structurally unsound bridge..
- A publicly listed firm playing fast & loose with their books
B)
Now you could argue that point #3 is not necessarily true - but amongst many things, there are two make the current situation highly suspect for anyone willing to let go of their preconceived notions
i) Using a C maybe D grade firm as the auditor and certifying authority for what is (or definitely was) amongst the largest public firms in the world. Have added a few articles at the bottom - take a look and think for yourself if you would use this entity for even your personal books
ii) I am not sure where you are from but lets say Maharastra.
If I accuse you of murder when caught with a smoking gun - but you actually have a valid alibi.. The first thing you would do is present evidence to refute my allegation.
What you will definitely not do is this - " How dare this Bihari chap attack a Maratha. This is an attack on Maharastra itself"
Unfortunately thats exactly what seems to be happening here
PS:
Here are some links for your perusal - you can choose to disagree with the inferences drawn but the factual aspects in here are indeed true
If You Let 23-Year-Olds Sign Off on Audits, You're Gonna Have a Bad Time
The audit partners at Shah Dhandharia who signed off on Adani Enterprises and Adani Total Gas’ audits were as young as 23.
www.goingconcern.com
And here is an Indian house that had flagged this back in July
The Financial ExpressRAISE A FLAG: Two proxy advisory firms advise against voting for Adani’s resolutions“Gautam Adani is the chairman and managing director of the company. ... and reappointment of Shah Dhandharia & Co as statutory auditors of....24-Jul-2022
eternoMind
Skilled
These binary arguments aren't immutable laws of physics that scale with size. This is precisely what I mean by simplistic points that fail to take into account variables that I and blr_p are talking about. Instead, the burden of providing the proof seems to be entirely on Adani, with no questions asked about Hindenburg or its motives at all. I even read a few pages back here that one should be thankful to them for 'exposing' this 'fraud'. If you think I'm walking around with preconceived notions, so are you about Adani's culpability before even the regulators/govt have had their say.A) While most things in life are gray - including the supposed backing for said corporate by the gov - and we can argue endlessly about them without either you or I being wrong.
However certain things are indeed binary and non negotiable.
- A medical doctor violating the hippocratic oath
- A civil engineer accepting a bribe to certify a structurally unsound bridge..
- A publicly listed firm playing fast & loose with their books
B)
Now you could argue that point #3 is not necessarily true - but amongst many things, there are two make the current situation highly suspect for anyone willing to let go of their preconceived notions
i) Using a C maybe D grade firm as the auditor and certifying authority for what is (or definitely was) amongst the largest public firms in the world. Have added a few articles at the bottom - take a look and think for yourself if you would use this entity for even your personal books
ii) I am not sure where you are from but lets say Maharastra.
If I accuse you of murder when caught with a smoking gun - but you actually have a valid alibi.. The first thing you would do is present evidence to refute my allegation.
What you will definitely not do is this - " How dare this Bihari chap attack a Maratha. This is an attack on Maharastra itself"
Unfortunately thats exactly what seems to be happening here
PS:
Here are some links for your perusal - you can choose to disagree with the inferences drawn but the factual aspects in here are indeed true
If You Let 23-Year-Olds Sign Off on Audits, You're Gonna Have a Bad Time
The audit partners at Shah Dhandharia who signed off on Adani Enterprises and Adani Total Gas’ audits were as young as 23.
And here is an Indian house that had flagged this back in July
The Financial ExpressRAISE A FLAG: Two proxy advisory firms advise against voting for Adani’s resolutions“Gautam Adani is the chairman and managing director of the company. ... and reappointment of Shah Dhandharia & Co as statutory auditors of....24-Jul-2022
Again, regarding the simplistic analogy you use of the murder thing, I wouldn't present the evidence to YOU, i.e. the one who's making the allegation. I also don't see anything wrong in that rhetoric (especially given the hyperbolic rhetoric in Hindenburg's report) you refer to because I'm not obliged to counter your narrative, especially as there's ground to believe it's not entirely driven by human rights/fiduciary/financial concerns. I'd rather present my evidence in court.
In every link you've shared, the theme seems to be that 'it stinks' and therefore it must be rotten. But you don't trust the govt/SEBI to confirm if that's the case, and neither do you prefer to let the market find things out for itself. Ergo, your lack of faith in the ruling dispensation spills over into a lack of faith in the regulators. Fair enough, we have our biases. I just think it's prudent to wait and watch, especially given the geopolitics involved, before buying into the narrative as outlined by the comical title of this thread.
Getting pedantic, are we
. It's not even a month since the fall began. As the graph shows, after the precipitous fall, the trend hasn't seen further drastic falls. TinTinSnowy
Adept
superczar
Skilled
After 20 years in the financial services industry , i can say with reasonable conviction that I have developed a reasonable knack for smelling out a stink.
I had my concerns at an empirical level even before this fiasco - hence have had zero exposure to the group stocks for my active investments.
Anyway, links i shared were for only one specific facet of the findings that does not require SEBI or the govt or anyone else to confirm. And the markets have already spoken
But you seem to have your mind made up already so nothing I (or any other source for that matter )will say will change that POV.
And since you are so convinced, I do hope you are plonking down your life savings into the group stocks - coz If I were half as convinced as you, I would be going all out !
The current super discounted valuation presents an opportunity of a lifetime. You could take an early retirement and sip martinis on a yacht instead
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blr_p
Skilled
All you need to know about Watchell, law firm hired by Gautam Adani against Hindenburg
Founded in 1965 and based in New York City, Watchell is one of the most expensive legal firms in the United States.
Hope he gets his money's worth
It's already done
Haifa Port Acquisition By Adani A
Adani Ports and Special Economic Zone Limited (APSEZ) in Israel, the company, jointly with Israel's Gadot Group, won a tender to privatise Haifa port, the second largest port in Israel
That port was acquired only three weeks back. The Americans help him get the deal by encouraging the Emiratis to take a pass and pressuring the Chinese not to submit a bid. Chinese still have another port a short distance away. So it was seen as strategic that China was balanced in Haifa by India.
That is I2U2 (US-India-UAE-Israel) vs. China
It's the bonds abroad that are taking the hit. Sentiment does play a part in influencing investors. A slight panic can spread.
One commentator I heard said this stunt has set back Adani's future plans by five years. Now if in a few months, it is shown as I expect that none of these allegations is true the damage done does not disappear also. I'm surprised how some people here are completely blase about that bit.
Bingo!
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blr_p
Skilled
I meant how much would the short sellers have made? What would a ballpark figure be among the bigger short sellers?
He's got protection. Someone with deep pockets who will defend him. Otherwise, he can't go after big fish like Adani. The question is who is it or they?
Now to write that report he relied on whistleblowers. Could he get charged for insider trading? What manipulation is going on here?
Because if nothing is found then Adani files disgorgement charges. This means payback the loss suffered by each individual plus delay costs of projects because of this man.
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superczar
Skilled
Big difference between planning and actually doing it.
There was also news about them hiring at least a tier 2 audit firm (Grant Thornton) in place of Shah Dhandaria - which the Adani group later stated to be a market rumor.
Lets see what plan yields
The problem is that its retail thats sentiment driven - and retail is near negligible for the group (except ACC and a few smaller ones)
If the allegations indeed are untrue , the shares will bounce back.
moe importantly, their ability to raise capital also will.. so any damages will be rather short lived and non-consequential in nature.
You are underestimating the institutional markets capability to separate fact from fiction.
I cannot think of a single instance in history where a 100B+ market cap was badly damaged just because sentiment without substance.
Why would Adani be any different
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blr_p
Skilled
Hit job gets done, and people say he deserved it and that he's a crook. That is what happened here.
Whatever happened to innocent first until proven guilty? It got inverted.
First, they got some housekeeping to do. They will take this to the extent possible.
Where did you get the word planning? they were engaged ten days back.
What house keeping? You say these things as if you are an insider at Adani group. Or everyone else here dont know about a press release by adani group where they said “we got some house keeping to do first”
superczar
Skilled
Who has presumed guilt?
More than the allegations, its the rhetoric laced response from the group itself that has spooked investors.
Videshi Taqat type rebuttals may work for politicians but have the exact inverse impact on financial institutions - surely the C-suite folks at a behemoth would know that?
In any case, if you are indeed right, we should see a massive lawsuit coming up soon.
Given the factual nature of the allegations, it should be relatively straightforward for them (Adani) to counter and thus utterly destroy the alleging party .
The scale of market cap damages from a set of unsubstantiated claims are unprecedented in not just India but world history - Given they (Hindenburg) have also made money off said allegations, it would not just be a defamation case but also a water tight financial fraud lawsuit
Perhaps we return to the thread in a month to see where it goes?
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blr_p
Skilled
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Gautam Adani maps comeback strategy after $132 billion Hinderburg rout
timesofindia.indiatimes.com
Considering their stocks are now being part of some nifty indices, investing parties will have no recourse than to invest in those stocks one way or other. And will need to push them up for their own benefit.
Adani news: Gautam Adani maps comeback strategy after $132 billion Hindenburg rout | India Business News - Times of India
India Business News: Adani and his aides have been in damage repair mode since the publication of the Hindenburg report. Besides a campaign to portray themselves as respon
timesofindia.indiatimes.com
Considering their stocks are now being part of some nifty indices, investing parties will have no recourse than to invest in those stocks one way or other. And will need to push them up for their own benefit.