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-   Shifting gears (https://www.team-bhp.com/forum/shifting-gears/)

-   -   US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history (https://www.team-bhp.com/forum/shifting-gears/261747-us-based-firm-hindenburg-alleges-adanis-pulling-worlds-largest-con-corporate-history-25.html)

Short answer: yes.

Unlike some of Hindenburg's previous targets (like Nikola), Adani has underlying assets that are revenue earning and growing in size over the years. As @avishar rightly put it, "Short-seller attacked an overvalued company. Overvalued company saw its market price correct. Short-seller made money.".

Even if Adani has to honor more future payments in advance; they will figure out alternate means (other than selling/pledging their shares) to make the payments. In absence of Hindenburg's report, the debt payouts would have occurred as they have been in the past. Plus the FPO would have rolled out to massive oversubscription and they would have got enough infusion of equity cash to handle future debt payouts and other investments.

Frankly, the ball is in the regulator's court. If RBI & SEBI pull up the murky dealings of Adani (via the shell companies and etc.), then there might be a bigger impact for the Adani management to handle.

That's a very myopic view of things. Why?

AMBANI is profiting from refining Russian crude and selling it to EUROPEANS.
BUT, who will compensate for the loses when govt decided to freeze fuel prices thus taking away company's retail fuel market. Many companies would go bankrupt in a similar situation.
There has to be some compensation whether that appears fair to the larger audience or not. And the govt, I guess is doing exactly that.

NATIONALISM is perfectly ok in this world. Ignorance is not a bliss. Pull out articles from July 2021 about adani group. Why do hindenburg research have so many reactions but not, when almost the same things were reported by domestic (renowned in stock market) journalist in July 2021. Nobody is asking anyone to buy Adani shares and retail participation is and has been miniscule.
BUT, here in India like any other credible democracy, it's INNOCENT UNTIL PROVEN GUILTY. Also, laws differ from country to country and what may be a crime in one country, in another country that might just be legal. We have our own laws and regulators to take care of that. More importantly, laws are updated regularly because we will never stop finding loopholes and that's good in the long term whether that appears fair or not.

I wouldn't even have replied but it's becoming fashion to criticise in the name of NATIONALISM. I will always give more importance to my home as compared to my locality, more importance to my locality as compared to my city, city > country, country > world, earth > other celestial objects. Tell me if I'm doing/learnt it wrong.

I am sure you already know how Adani used strong arm tactics to shut down investigation by domestic journalists. The fact that he could do it so easily points to a completely broken system and no action by our regulatory agencies points to active collusion by the government.
We may have our own regulators but their credibility is questionable.
On the question of nobody "asking anyone to buy", should I then be allowed to run a Ponzi scheme?
After all, I'm not forcing anyone to invest, right?
In the end, I don't really care WHO reports a crime, it should be investigated HONESTLY.

While you may consider this a "myopic" view, I would consider blind nationalism as immoral. The invasion of Ukraine or any country is reprehensible and should be condemned. The government using this opportunity to "compensate" Ambani is a vile act of profiting off the deaths of innocent people. As I said earlier, it doesn't help our public in any way.
And if enrichment of Ambani is so crucial, then all governments irrespective of party in power have already been doing it but the greed can never be sated.

There are far greater things than nationalism which is just based on the accident of birth.
I'll leave you with 2 quotes that say it best.

"I should like to be able to love my country and still love justice."
Albert Camus

"Nationalism is an infantile thing. It is the measles of mankind."
Albert Einstein

I can't say with certainty that you are wrong, but this is not how everyone chooses to live their life. In my circles it is very much the done thing to criticise foreign companies that flout regulations, exploit people, or defraud investors. We would be absolute hypocrites, in our worldview, if we did not do the same for Indian companies. I hope that there is a credible investigation into Adani, and that the issue can be laid to rest one way or another.

As for nationalism, I am neither a nationalist nor a patriot, but I see nationalism as negative, and patriotism as positive. This is not an original view; I have lifted it straight from George Orwell's definitions of the terms:

+1

From pure finance point of view, that one line is answer.

Oaktree Capital is buying Adani bonds. Howard Marks has had a very successful run on buying bonds (read distressed) which are not doing well but have potential. Whether they were a part of the short gang who are now covering is up for speculation. If they were then it means bottom has been hit.

Even if that is not useful, members can do themselves a favor and subscribe to his "Memos from Howard Marks". They are a gold mine of information on money, markets and human behaviour.

Countries that formed a part of the erstwhile Soviet Union have seen the growth of massive oligarchies in the past two decades, as those countries’ governments sold off vast government-owned enterprises to private companies. Is electricity distribution in India headed in the same direction?

https://www.adaniwatch.org/adani_s_p..._privatisation

Can Hindenburg do a similar story on Reliance and achieve a similar result? How is it different for Adani?

Depends on if they can find a cause for shorting the stock of Reliance. Remember Hindenburg is no saint looking to right any past wrongs. They are just to make a quick buck by shorting stocks. They hardly care for anything else to change in the longer time line with regards to the firm in question.

I'm no expert but doubtful there is any opportunity for them to do a similar attempt at Reliance.

The Adanis are in the news trying to repay several thousand crore Rs of LAS. They sure have the capacity to repay. Will put some promoters/investors under comfort. Repayment of $1.1 billion would likely boost sentiment and Adani share prices might rise again.

I'm not able to get much on this though. How much did Hindenburg make and through what means?

In my layman's view, we need Indian institutions to indulge in short selling. Industry professionals need to show and tell the holes in the growth stories told by businessmen. Solid Business models will definitely hold water in front of short selling theories.

Promoter holding in Indian companies is too high, making it vulnerable to their bloated growth stories. Short selling would be the reality check. We need an Indian Hindenberg, whose publishings can't be squished out by big business houses.

I was going through Adani Port's earnings.

This is their debt maturity timeline. Of which, they seem to have pre-payed the $600 million bond that was due in FY24-25.



https://economictimes.indiatimes.com...w/97712005.cms

The business is generating Rs 12,500 EBITDA. For next year they have cut capex.




Where the debt will stand next year.




EBITDA margin of 70% in Ports




Their current portfolio




Seems like they have no plans on stopping their logistics build up

This needed a reply so I couldn't stop myself.

ADANI : All the reports were published by the said journalist and it was upon us as to how to consume those reports. But unfortunately for some of us, it takes an approval from the west.
Calling Adani a Ponzi scheme whose assets are all around the world is a blind view of things. Stock prices are not generally indicative of how
a company is doing currently, it's more than that. I wouldn't be surprised if Adani group goes bankrupt or becomes a Trillion Dollar group in future. Risk vs Reward at play. And I'm sure Adanis international competitors are also funded with cheap debt. Let me give you an ordinary example as to how debt works for rich people. Let's say if someone is planning to buy a 1000 crore property, he will get loans to pay for the property. Now on that property, he will get another loan of around 700 crores for buying a yacht, then he will get another loan against that yacht for 500 crore to buy an aeroplane, then he will get another loan against aeroplane for buying a chopper and so on and so forth. The reason is that there is no tax on debt. And some of those rich people will eventually go bankrupt but that doesn't mean banks will stop lending to rich people.

AMBANI : Govt is paying money to govt OMC's to compensate for losses but not to Ambani. You call this enrichment of Ambani? If the govt bails out it's owned industries then it's ok but private companies are a no go, is that what you are suggesting? Or you want these companies to file cases against GOI in international arbitration courts and thus bring bad name to India.

ACCIDENT OF BIRTH : Not a nice choice of words for something so real and beautiful. My birth place has been contested by 2 nations for past 70+ years but still not an accident as per me. Who will defend the borders if not for Nationalism. Nationalism is more than just quotes quoted by those leaned personalities you mentioned. EINSTEIN probably said that during war era and not everything he said is true. And this particular quote is only fair when all the countries are like that. What CAMUS said is very vague for this topic. Whose country whose justice? I feel that quote is pro nationalism because he wants to love 'his' country not the world.

Being pro businesses and stating facts is not nationalistic. Trillions of dollars have been given to USA domestic businesses from 2020 onwards. How will competition survive if they don't take a nationalistic view. Or probably we are better off living a simple life while remaining poor.

“Let some people get rich first.”
Deng Xiaoping

For those who don't know about Deng, it's because of him what China is today. Tiananmen square happened under his watch as well. I could have not stated Tiananmen square but I don't like to prove incomplete information.

We have been buying oil from the following nations:
US = Funding their killing of the Afghans, Iraqis, Libyans, Syrians
Saudi = Funding the killing of the Yemenis
Venezuela, Brazil, Nigeria the list will go on.

Its a commodity and you buy it from the cheapest provider. :Frustrati

Lets not turn this thread into some Superiority contest. Lets stick to the topic.

Thanks for a sane reply.

I think most middle-class Indians need some understanding of economics and finance. They are often street-smart but lack an understanding of how businesses work on a larger scale. I hope Indian news channels cover such topics so the public can form a more balanced opinion against big corporates.

Plenty of Indians are still hoping to revive the bidi/agarbatti business and expecting union leader Amitabh Bachchan to bring 'justice' against evil Ambani/Adani while using Ambani/Adani's business-produced food, fuel, phone network, electronics, etc.

The same social media where the 21st century humans seem to get all their information, also has plenty of non-partisan sources handing out all levels (layman to professional) of education on all sorts of topics.

There even are specific business news outlets; print, TV & internet-based.

At some point, it's upto the individual to use the tools at their disposal to educate themselves. Can't rely on media conglomerates, they might have a multi-point agenda but it's doubtful educating the public even cracks anyone's top 5 these days. Quite the opposite, a well-informed person is far harder to whip up into a frenzy over something they don't understand.