[Hari Seldon]

Very interesting thread. So people have apprehension of few CAs doing the audit but are fine when other set of few firm employee put dirt on the same business. Let us allow competent authorities do due diligence instead of giving verdicts.

Disclaimer: owned ACC shares, sold them a day back. Waiting and watching the investigators to bring more info out.

[speed79]

There are 3 types of people:
1. Socialists
2. Capitalists
3. Pseudo-socialists

The first type (true socialists) do not exist in the real world. This type exists only in thoughts, not in reality.

The second type (capitalists) are the who try to work hard or work smart and earn whatever they can for themselves. This is the type that creates employment, contributes to growth of a country and better lives for people by better product and services.

The third type (pseudo-socialists) exist in large numbers in any society. This type loves to own houses and swanky new cars, but they think that they are socialist. This type gets irritated easily by someone else's financial success, and is always ready to jump the guns against the Capitalists at the frivolous reasons. This type might be getting their employment at some company run by a Capitalist, but they want to see the capitalists go down as the capitalist are evil. All they want is their monthly pay-check, not realizing that the pay-check would come from some business run by a capitalist.

All types of people try to find work arounds to earn more money or to save tax in varying amounts. The big ones have team of CAs to find loop-holes, and the smaller ones try to give fake rent receipts, fake medicine bills, fake fuel bills, buy cars on company lease and register property at rate lower than market rate thereby adding black money to the economy etc.

Someone said that all infrastructure projects should not be given to only a few companies. The infra projects are up for grab by anyone who can arrange long term capital to build infra and can compete with others. Govt doesn't restrict infra project to be given to a handful of companies. It is only that there are few companies who can really arrange the capital and execute the project, otherwise any Tom, Dick or Harry could buy/build a port or an airport.

And Hindenburg is not there for social service or are saints. They are short sellers, and they unearth the wrong doings by some businesses to earn money for themselves. And the sharper the attack, the more it hurts the target business (and the public members holding the shares of that business) , the more Hindenburg gains from the mayhem.

[karanddd]

Originally Posted by Car-go-man

Should we not restrict this forum strictly for automotive discussions and perhaps few other helpful topics that educate us rather than we debating about things that are only wasteful of our precious time?

Nobody's making anyone debate anything. It's a free country, and a free forum. You can always choose not to read or post in threads you don't care about.

[sachinayak]

It is not only the socialists who could be classified as socialists or pseudo-socialists. Capitalists too can be classified into capitalists or crony-capitalists.

Wikipedia defines crony capitalists as

Crony capitalism, sometimes called cronyism, is an economic system in which businesses thrive not as a result of free enterprise, but rather as a return on money amassed through collusion between a business class and the political class.

Originally Posted by speed79

Govt doesn't restrict infra project to be given to a handful of companies. It is only that there are few companies who can really arrange the capital and execute the project, otherwise any Tom, Dick or Harry could buy/build a port or an airport.

The problem or angst on this thread, or stock markets in general is against the crony-capitalism at play here. No one would have an issue if a company raises capital and executes projects, if done fairly. The "if-done-fairly" is now the question, given the allegations. The regulator is perhaps at a bigger fault, but then only time will tell.

[download2live]

An interesting artice on Reuters.

-------------------------------------------------------------------------------------------
Short sellers such as Hindenburg like to build positions quietly before unveiling their thesis about the company to maximize profits. Discretion is necessary for them, as word of their presence in the stock sometimes can be enough to cause the shares to fall.

In India, however, securities rules make it hard to quietly build positions. Institutional investors are required to disclose their short positions upfront and there are other restrictions and registration requirements on foreign investors.

With the Adani Group, there are added complications: the shareholding is concentrated in the hands of the Adani family and its shares do not trade on exchanges abroad.

Nathan Anderson, Hindenburg’s founder, has been coy even with peers about his bet against Adani. Left and Carson Block, the founder of Muddy Waters Research and another prominent short seller, told Reuters that they got a single word response – ‘thanks’ - to messages of congratulations they sent to Anderson, when usually they would talk shop.

Cracking the code of how Hindenburg did the trade could lead to more short sellers taking positions against Indian companies, which have been rare, analysts said.

“Once these things (short-seller attacks) begin there are others who could be looking,” said Amit Tandon, managing director of proxy and governance firm Institutional Investor Advisory Services (IiAS) in India.
------------------------------------------------------------------------------------------------

Call me cynic but I think expecting a company to have a saintly and spotless record in India is kind of a pipe dream. Dig deep enough and you will unearth shady dealings.

However I am not surprised to see a total lack of retail investors side of story who made money on Adani's exponential growth (800%+) since last 5 years.

[warrioraks]

Adani enterprise share is almost 50% down over last 5 days. Hindenburg short-sell trades must have made a killing!

[D4d-maniac]

https://www.indiatoday.in/amp/busine...459-2023-02-02

RBI has put Adani on watchlist. SEBI is going to investigate Adani.
Adani enterprises share price down 20% in today’s trade and hit Lower Circuit.
Now it’s getting really serious.

[Naztone]

Using Adani's Mundra port back in 2002 as a benchmark, the rise of Adani is bewildering to me.

I have been watching this saga unfold with keen interest and realised that Team-BHP has the best collated data and discussions on it - even though we are an automotive forum. This thread adds value to anyone looking for a non-media centric view.

I wonder how deep the repercussions of this could go for the previously untouchable trio from GJ.

[rnb34]

There is no doubt that the Adani group is heavily leveraged. This has been in the news for quite sometime with many expressing concerns over the way the group was being run. The recent acquisition of Gujarat Ambuja and ACC from Holcim was once again funded by borrowing. And upon acquisition of the shares of these two companies, they pledged the shares of both the companies.

The decision to cancel the FPO, though on moral grounds as claimed by Gautam Adani, is bound to affect the group's ability to service its debts. Difficult times ahead for the group as well as the lenders.

Originally Posted by deehunk

Adani's Cash Mundan may become the opposition party's trump card in the upcoming polls in Karnataka. His ill-gotten wealth reminds me of these lines from Basavanna's vachana, translated for non-Kannada members,

ಪಾಪಿಯ ಧನ ಪ್ರಾಯಶ್ಚಿತ್ತಕ್ಕಲ್ಲದೆ, ಸತ್ಪಾತ್ರಕ್ಕೆ ಸಲ್ಲದಯ್ಯ!
ನಾಯ ಹಾಲು ನಾಯಿಗಲ್ಲದೆ, ಪಂಚಾಮೃತಕ್ಕೆ ಸಲ್ಲದಯ್ಯ!

A sinner's wealth is not for good cause but for remorse!
A dog's milk is not a nectar for sweet but for its puppies!

Quoting @deetee, can SEBI temporarily freeze transactions of Adani shares till a thorough investigation is carried out to protect the genuine investors?

[whitewing]

I still can't figure out how any bank finance institution having collateral would want to liquidate their positions. Surely they stand a better chance if they wait a bit more?

Reason being this is a thinly traded stock - putting up a comparison to ITC & Adani Ent (data pulled from NSE site, till yesterday). If any one dumps significant amount of shares, surely it will be a free fall.
And there are only so many shares to dump given its small free float, after a couple of weeks, there wouldn't be any encumbered shares to dump. And surely the FIIs who saw value of Adani Ent at 3K+ in the FPO would have lapped up these shares?


As to the holdings, this is has such concentrated holdings (from Adani Ent annual report, hence data is a bit stale). Nevertheless, the point is, the direct impact will be limited to a few entities, but the fallout (noise around corp governance, lending rates etc.) will be felt by many more.

Originally Posted by rnb34

...The recent acquisition of Gujarat Ambuja and ACC from Holcim was once again funded by borrowing. And upon acquisition of the shares of these two companies, they pledged the shares of both the companies....

Apparently not according the a press release from Adani https://archives.nseindia.com/corpor...diaRelease.pdf
I decided to catch a falling knife, and bought some ACC shares today.

[avishar]

Adani is a great company with solid financials AT the levels that it was, in 2020.

So what happens to Adani now? My take

1. Broader market does not care. Because neither of their companies are at any risk, nor is any of their debt at risk. Regardless of what anyone says.

2. The stocks are going to tank. There is still a long way to go for Adani Total Gas, Adani Transmission, Adani Green Energy. You can add Adani Wilmar too, because it is basically an edible oils company with wafer thin margins, priced at a PE of 100. Down you go.

3. RBI will probably ask Adani to offload promoter stake and give some halka-fulka scolding. Stocks again under more pressure

4. Borrowing costs will increase abroad and also domestic banks will now be wary. Not because it is risky to lend to them, but the very idea of lending to them might have big negative perceptions on their stock.

5. Adani needs to stop being greedy and restructure the group. He should stop thinking about Copper, Hydrogen, Real Estate and Defense. Too many things. To me, the stuff like the Dharavi redevelopment is red flag, why do you want to get into it? Returns might be high but too risky.

6. Adani should let go of ACC and Ambuja. They are very good assets, flush with cash. Sell them off (or conversely not be in debt).

7. Adani's current business are run very well, which is pretty remarkable for an infra. We have endless carcasses of those in India.

He can happily be 50th richest in the world.

[SmartCat]

"Finfluencers" (finance influencers on instagram/twitter/youtube etc) are getting offers from Adani PR team apparently:

Originally Posted by whitewing

I still can't figure out how any bank finance institution having collateral would want to liquidate their positions. Surely they stand a better chance if they wait a bit more?

Financial institutions are not losing money now despite a 50% fall. If they wait a bit more, there is a possibility of losing money. There is no discretion involved here - at a certain price point, shares are sold to recover the loan principal.

I suppose you know this already, but this is not a special privilege given to promoters or stock market traders. Anybody can pledge shares or mutual funds and avail the loan facility. If one has an equity portfolio that is currently worth, say Rs. 10 Lakhs, (s)he can get a loan of between Rs. 3 Lakhs to Rs. 5 Lakhs, depending on marketcap of stocks. Eg:

https://sbi.co.in/web/personal-banki...against-shares (from SBI)
https://www.hdfcbank.com/personal/bo...nst-securities (from HDFC Bank)
https://www.icicidirect.com/loans/loan-against-shares (from ICICI Bank)



If the stock market starts crashing, the bank will call up first (the infamous "margin call"). They will ask for the principal back or ask to pledge more shares and give one/two days to comply. If the borrower cannot pony up the cash, the shares are sold!

[Peterf]

Originally Posted by karanddd

Nobody's making anyone debate anything. It's a free country, and a free forum. You can always choose not to read or post in threads you don't care about.

Based on this we should not have strict moderation on any team bhp thread. No one should be forced to do anything. But topics like this do encourage to click on them don't they However in any debate with political undertones things start going downhill because as humans we tend to lose focus on objectivity and start becoming emotional.
People start taking sides, and slowly things go out of hand. Have been an avid reader of team bhp and hopefully we remain a 'Car' forum first rather than turning into twitter. Now going back to XUV 700 thread.

[tsk1979]

Originally Posted by speed79

There are 3 types of people:
1. Socialists
2. Capitalists
3. Pseudo-socialists

I remember a chit fund owner who ran away with peoples money. He made a lot of money before being arrested. What category does he fall in? Capitalist? Socialist? Pseudo-socialist?

And why do you say type "1" does not exist. Our govt is socialist to quite an extent. Otherwise you would not have social welfare schemes, and high taxes to fund those schemes.

Lastly, in that category do scam call centers fall?

They generate money and create employment. So are they the good capitalists being criticized by psuedo socialists.

And do not forget the Black underwear gang (Kala Kaccha).

They generate profits.
Employ people
And solve overpopulation problem by murdering entire families

Socialist? Pseudo Socialist? Or Capitalist

Originally Posted by SmartCat

If the stock market starts crashing, the bank will call up first (the infamous "margin call"). They will ask for the principal back or ask to pledge more shares and give one/two days to comply. If the borrower cannot pony up the cash, the shares are sold!

And what if the stock falls to the level lower than whats borrowed? That's the risk. Remember, a 1 crore account may have 3 crore margin eligibility. These type of crashes can often result in a chain reaction, the kind of which happened in 2008 with junk sold as AAA

[v1p3r]

Originally Posted by tsk1979

Socialist? Pseudo Socialist? Or Capitalist

Saar have you ever heard that old gem? The one where arguing only makes you dirty, and you're not the one enjoying it...

Also, you'll need to merge your posts.