[DaptChatterjee]

Prof. Damodaran, the famous valuation guru, expresses his views on the Adani saga.

Link

[ranjith_cbz]

Originally Posted by DaptChatterjee

Prof. Damodaran, the famous valuation guru, expresses his views on the Adani saga.
Link

Watched the full interview. Wish our media interviewed more people Aswath Damodaran who is more balanced, nuanced and humble enough to admit that he is wrong many times in the past.

The key takeaway is that India lags behind in Infrastructure sector and there not many business houses who want to venture into it. This sector also requires massive capital and takes a great deal of time to recoup them and turn profit.

Hope this whole episode is taken as an opportunity by Adani and other Indian businesses to reform their corporate governance and regulatory compliances.

[ShortShifter]

Originally Posted by trippytragopan

With respect to this issue, I have zero hope of any discussion happening in the parliament. The forming of JPC or supreme court supervised committee is a far-fetched idea.

Good, Why should Parliament waste its precious time with a JPC, just because vella opposition parties have too much free time to spend ? There are far greater issues that affects common man which requires urgent attention.

If Hindenburg ties up with the tool kit ecosystem in our country they can do a 1 Indian Corporate Hit Job per week and laugh all their way to the bank, thats how well oiled the ecosystem is, we as a nation must be more self aware than get triggered so easily.

[sachinayak]

Originally Posted by ShortShifter

Why should Parliament waste its precious time with a JPC, just because vella opposition parties have too much free time to spend ? There are far greater issues that affects common man which requires urgent attention.

Multiple reasons for this to happen (without getting political)
1. This incident is about a group that is supposed to deliver on multiple infra projects. If there is a risk/concern raised on this, it is important for the nation to know and take necessary action to avoid another IL&FS scenario.

2. The incident raises queries on our regualtory authorities. If there is a probe that confirms that all is well, it augurs extremely well for our regulators and more importantly it cements India's image in terms of governance and transparency.

3. If however, there is a genuine problem the surfaces, you would want to catch it much earlier than it snowballing into a much larger issue. Adani group may in percentage terms be a small amount of SBI/LIC investment, but in absolute numbers, the investment is massive. This is the money of people and no reason why people cannot demand accountability.

[poloman]

Why should so many on the forum be so anti corporate? Even when 90% of the members most probably be employed in a private entity for sure.

This has to do with the conditioning we have. We have been taught that industrialists are mafia and steal common man's money. Lakhs of crores in corporate loans are written off. So they are leaching on the general public. This is the general line most media and political parties take.

But how many agree that there is no economy with out business. There are no jobs with out business. Millions wont have livelihood with out business and industry. This is a high risk game. Most companies will end up in genuine loss and wont be able to pay off the loans and will need to be rescued. So government has to encourage risk takers, not people who deposit money in fixed deposits. With out risk takers there is no innovation or progress to humanity. So don't get riled up when you hear some corporate loans have been written off. But we should demonize willful defaulters like Nirav Modi, Mallya and the likes.

Also crony capitalism should be criticized to the core. The greatest concern in Adani story is monopolization of ports and airports to a single entity. If this is through genuine means, no issues. But was the process skewed to favor Adani, that is what should concern general public.

Some are saying nationalize Adani. How ridiculous.! A significant chunk of our tax money is already going in to paying government salaries and pension. On top of that some states for vote bank politics are resorting to old pension scheme which will be a even more drag on exchequers. We have to stop being the 1970s and 1980s socialists who destroyed the country's progress.

[buzzy_boy]

Originally Posted by poloman

Why should so many on the forum be so anti corporate?

Quite contrarily, I don't think the members of this forum, and the general public, are against "ethical" businesses. For instance, I'm yet to hear one negative sentiment towards companies like Wipro, TCS, Tata Steel etc.

People do have issues with how some powerful capitalists can seemingly get away with anything. For instance, in the industrial area of Coimbatore, Tamilnadu, I'm yet to come across one instance where the loans of a struggling small business were written off.

People have problems with selective enforcement of laws. The governments, across all parties, haven't covered themselves with glory on this aspect.

Private businesses are important to the economy. But, they're not above the law. They must be punished if they break them. The fact that these allegations were made by a US entity must not be the reason for summarily dismissing them. They must be investigated, and there must also be transparency with respect to the investigation.

The onus is on the government to earn the trust of the people - and rightly so.

[itisK]

Originally Posted by buzzy_boy

Quite contrarily, I don't think the members of this forum, and the general public, are against "ethical" businesses. For instance, I'm yet to hear one negative sentiment towards companies like Wipro, TCS, Tata Steel, etc

I would certainly not consider businesses such as Wipro or TCS as 'ethical' businesses. They are exactly the same as any other big businesses around as. Maximizing their profits by all means possible. And I don't resent them for it. But I certainly don't hold them on a pedestal as compared to others.

The difference lies solely with media management. Please look up how many media outlets these big businesses are donating to periodically. Adanis will learn from it. They have already started working on it by buying NDTV, and they are going to be even more aggressive in this regard now.

P.S. This should not be interpreted as defending Adani in this fiasco. That should be dealt according to the laws of the land.

[AZT]

Originally Posted by poloman

Why should so many on the forum be so anti corporate? Even when 90% of the members most probably be employed in a private entity for sure.

This is a straw man argument equating Anti - Adani with anti "corporates as a whole". Same as the twitter PR stunt of anyone calling anyone anti Adani as anti national.

I'm legit surprised so many people fell for both of these.

[thanixravindran]

A good article that explains the non Indian traded derivatives shorting of the Adani stock -

https://www.thehindubusinessline.com...89053.ece/amp/

[jaaz]

Originally Posted by msdivy

What if Hindenburg had not happened? What would the story be then? Will Adani would have honored all his debts?

Never. One day or the other, it'll fall like a pack of cards. It's like a Ponzi scheme, which has to fall one day. Over leveraged businesses cannot run for long.

Who's going to pay for it? - It's you, me and other tax payer's money.

How? - By writing off the loans.

We all have already paid for Adani write offs in the past, which is not disclosed by the GOI.

But current situation, it's different. Borrowings are more overseas than in India. So, the corrupt or black money sent abroad can be converted into white by repaying the overseas loans. Mauritius, Cayman Islands etc.,

Why should we bother if there's corruption in India? - It'll lower our standard of living. From a developing country, we can become Poor. It may not affect us, but future generations.

[tsk1979]

Originally Posted by itisK

I would certainly not consider businesses such as Wipro or TCS as 'ethical' businesses. They are exactly the same as any other big businesses around as. Maximizing their profits by all means possible. And I don't resent them for it. But I certainly don't hold them on a pedestal as compared to others.

The difference lies solely with media management. Please look up how many media outlets these big businesses are donating to periodically. Adanis will learn from it. They have already started working on it by buying NDTV, and they are going to be even more aggressive in this regard now.

P.S. This should not be interpreted as defending Adani in this fiasco. That should be dealt according to the laws of the land.

Jumping a red light and murder... Both are crimes. But one does get treated differently.

The kind of shady practices many companies do are very small fry in comparison to what companies like Enron did. What is Alleged by hidenberg also falls in that category.

Remember, its an allegation, and I am wondering instead of showing that chaps mug on TV why doesn't the company go to US court? They could get their billions back and shut down hidenberg for good

[itisK]

Originally Posted by tsk1979

Jumping a red light and murder... Both are crimes. But one does get treated differently.

The kind of shady practices many companies do are very small fry in comparison to what companies like Enron did. What is Alleged by hidenberg also falls in that category.

Remember, its an allegation, and I am wondering instead of showing that chaps mug on TV why doesn't the company go to US court? They could get their billions back and shut down hidenberg for good

This is precisely why I had added a disclaimer at the end of my post. I am not commenting on the severity of the crime. Neither am I asking to let Adani escape the scrutiny.

However, when we rightly question Adani, we shouldn't put other businesses on a pedestal by calling them 'ethical' businesses either.

Just because there are murderers in the town, we can not call traffic violators as model citizens either.

(I'm deliberately avoiding going in to details of other corporate houses and kind of favours they drew from governments of the time, because that was not the intention behind my post.)

[jaaz]

Originally Posted by poloman

Adani has not defaulted any loans so far.

Above statement is wrong. Yes he has defaulted earlier, multiple times. Directly as well as indirectly too.

Most of the audits have been stopped or namesake in the last decade, so how can any Indian entity take on these companies officially. There were lot of reports earlier too, but all those have been silenced.

My common sense says, If there is no wrong doing, our answers should be straight and we should sue Hindenburg in US of A.

[ABHI_1512]

I have been reading through the thread every now and then and it’s amusing that this forum has discussed this issue more than perhaps even what the regulatory authorities like SEBI or RBI had probably done till date. Even the mainstream media is almost silent on this issue !! Thanks to the forum I would say.

Those who know about the structure of the businesses run by the Adani group know very well that chances of collapse are anyways very high. The broking houses or the Mutual fund managers have been avoiding the stocks of Adani since very long and that tells the real story. It’s a shame that entities like LIC and SBI are being called upon to rescue the ship. People who are sceptical have every right to question the working of a business group with shady dealings.

I am not going into how Adani got Mumbai Airport or the rest of the airports in the country. Or how the group ventured into coal mining in Orissa despite large scale protests or construction of highways in UP which the group recently ventured into and so on. We all know how NDTV was aggressively acquired and why. A company which was selling mustard oil some years back has now become so big that it has now presence in every big ticket project in India and some abroad as well. Unfortunately, brazenness is the new norm and as we know already, these accusations have been brazen out in the name of nationalism !!

Heck, even the Parliament refuses to discuss the issue and statements against Adani have been expunged from the recorded proceedings of both the houses !! So, we may discuss it here for as long as we want, truth is, it doesn’t matter.

[Ankur@VNS]

Originally Posted by thanixravindran

A good article that explains the non Indian traded derivatives shorting of the Adani stock -

https://www.thehindubusinessline.com...89053.ece/amp/

It is perhaps the first credible piece of information explaining extremely high volatility seen last week in low floated listed shares of Adani group of companies which led to around $100 Billion worth of market cap erosion.

As per the article, a very sophisticated financial instrument, called structured product derivatives (SPDs) was used, which is tailor-made by foreign brokers for large clients in offshore jurisdictions.



Accordingly, a massive built up in short position from December 2022 till 23rd January 2023 and then release of sensational Hindenberg's report just before expiry, created sharp fall in shares prices like Domino effect.



Strategic short selling with listed instruments either based upon intuitive instinct or well researched initiatives are perfectly legal, if not ethical.

But such kind of massive and well planned short selling via such offshore unlisted derivatives like SPD may cause havoc and contagious mayhem without being noticed even by regulators in real time basis.