[m8002?]

If you have a loan of 1M and fail to pay, you are in trouble.
If you have a loan of 100B and fail to pay, the bank is in trouble. You can just walk away.

[deetee]

Originally Posted by m8002?

If you have a loan of 1M and fail to pay, you are in trouble.
If you have a loan of 100B and fail to pay, the bank is in trouble. You can just walk away.

Difference is that , the 100B goes into pockets of various key nodes in the system.

[anjan_c2007]

About the firm Hindenberg Research. that has investigated a prima facie fraud by the Adani Group. Hindenberg has alleged that its latest target has undertaken brazen stock manipulation and accounting fraud scheme over the course of decades.
Nate Anderson its founder has investigated corporate frauds, has triggered regulatory followup actions and rebuffs by targeted corporates has sometimes faced their ire.

https://indianexpress.com/article/ex...ource=inshorts

[deehunk]

I have been following this person since his name came up during the missing case of confiscated iron ore from Belekeri port. It will be unfair to correlate his growth with one political party, so let us keep politics out of the discussion. He is safe just like other people who made a mockery of the judicial and financial system. There have been continuous allegations against Adani, especially in the Australian media for more than a decade now, he has just survived thanks to the support from our banks and consecutive governments.

https://www.smh.com.au/business/comp...26-p5cfpp.html

https://www.theguardian.com/world/20...lian-coal-loan

https://www.themonthly.com.au/issue/...s-ambition#mtr

[Sran]

Pretty much a hit job as some don't want investment inflow. Hindenburg is known to manufacture negative news to influence their short positions. Hindenburg research is a fairly new investment firm with 5 employees along with owner Nate Anderson. Hindenburg research and Nate themselves are under American Justice Department investigation for unfair trade practices and market manipulation including, “spoofing”—essentially flooding the market with fake orders to drive a stock price up or down—and “scalping,” wherein activist shareholders cash out positions without disclosing it. (https://www.forbes.com/sites/sergeik...h=62a4facb78fc). They are a cartel of traders that includes among many others like Melvin Capital and its founder Gabe Plotkin, Sophos Capital Management, Sprucepoint, Citron and Anson Funds who earn money through short selling. Anyone with with an IQ over room temperature could have told that Nikola was a scam. Comparing a conglomerate to an EV startup is malarkey. Raising capital is hard for infrastructure work and world over infrastructure assistance is provided by banks supported through respective governments. Billionaires are the most efficient way to deploy capital.

Adani coal in Australia has always been a pain for global conglomerates especially Chinese and South Koreans. Don't forget the Vizhinjam port in Kerala which will render few neighborhood countries ports (Colombo, Singapore and Salalah ports) useless and will put a severe dent to their economy( Rs2,500 crore a year).

LIC made huge profits (42,000 crores) due to Adani. LIC holds around 4% of the market capitalisation of Tata Group co. altogether other MF's hold around 5 per cent. LIC holds 6-7 per cent stake in RIL, MF's hold 5.68 per cent. LIC owns 16% of ITC, MF's 4%. Adani group net debt is around $20bn, mostly raised around 2020 and aren't due for another few years. Debt inherently is not bad, any economics book will teach that. Most of the debt is through foreign bonds instead of Indian Banks. Adani cos., get ordres from all over the country. In Rajasthan to setup one of the largest solar plant. WB gave them the maintenance order of its biggest port. Land mines and infra projects in Chattisgarh. Adani cos., have more order value than any other corporate. It means money, and that is what fuels stocks.

P/E ratios are high for many companies worldwide. The market cap of AAPL is >5% of the total value of US stocks and the top 5 largest tech companies account for >20% of the US stock market.As one can see JD.com which has a valuation of $84 billion has a P/E ratio of 682. Telefonica, a mobile company with net margin of 0.53% has a P/E ratio of 386 with a market cap of $22 billion. Worldwide, Advertising, chemicals, coals, IT, Asset management always have high P/E ratios. Worldwide business happens with shell companies and SPAC(Special Purpose Aquisition Company), SPV( Special purpose vehicle). One of the world's largest Asset management company Citadel is famous for it. Hindenburg has close associations with Citadel. But they were one of the few who made money through twitter debacle as Hindenburg was short on it. Citadel books are also valued by themselves (https://reports.adviserinfo.sec.gov/...PDF/148826.pdf) pg.57 Q.27, so one can understand American SEC. Creditsights is owned by Fitch ratings whose reports is cited, is known by everybody for its role in 2008 meltdown. Fitch is then owned by a conglomerate that owns 100s of media houses in USA and world over. Furthermore, the report was not toned down as phrased by hindeburg but creditsights acknowledged calculation errors in two key group entities of Adani cos.(https://economictimes.indiatimes.com...8.cms?from=mdr). And it's not like blaming financial audits on 24 years old is something noteworthy when behemoths like PwC audits Evergrande and says nothing. Hindenburg revealed the shady past of the owners but they use it to conclude that business plan is shit. They use the research to justify their position.

Company PE Ratio Market Cap

Insulet 1,207.08 $20.12 billion

JD.com 682.08 $83.83 billion

Constellation Brands, 654.10 $42.25 billion

Salesforce 557.75 $156.17 billion

Global Payments 507.66 $30.20 billion

ServiceNow 453.30 $90.65 billion

Pinterest 373.20 $17.72 billion

Dynatrace 368.94 $10.62 billion

Alibaba Group 300.63 $318.44 billion

BioMarin Pharmaceutical 276.26 $21.52 billion

MercadoLibre 210.55 $56.87 billion

DexCom 191.71 $40.17 billion

First Solar 191.21 $17.94 billion

Neurocrine Biosciences 190.88 $10.46 billion

Welltower 160.57 $34.90 billion

Match Group 153.16 $14.12 billion

SolarEdge Technologies 148.04 $16.80 billion

Prudential Financial 141.01 $37.77 billion

Brookfield Infrastructure Partners 137.77 $16.42 billion

Axon Enterprise 132.54 $13.68 billion

T-Mobile US 121.37 $184.22 billion

Live Nation Entertainment 110.76 $17.90 billion

International Business Machines 102.75 $127.26 billion

Enphase Energy 101.12 $28.59 billion

AstraZeneca 99.45 $206.48 billion

Progressive 96.08 $79.26 billion

Equinix 94.09 $66.61 billion

Burlington Stores 90.08 $14.64 billion

Amazon.com 89.20 $991.40 billion

NVIDIA 82.23 $481.14 billion

Intuitive Surgical 64.33 $86.16 billion

Walt Disney 62.86 $197.17 billion

[deetee]

Recent update from Hindenberg research, this is turning out to be an interesting real time thriller (only if the heat doesn't scorch us ):

[whitewing]

Originally Posted by kiku007

26-Jan-23: Republic day in the country with the largest population.
Someone starts a thread about alleged con/financial misconduct by the world's 3rd richest person. I just smile and remind myself that the long arm of the law will only question the person who installed the sunfilm and won't move one inch to investigate the alleged con. Apparently he's building infrastructure. Sure yeah, because no one else could have I guess.

Long live democracy.

You took the words from my mouth! On a day the country's rule book was rolled out.
The the focus ought to be on the rules (supposedly) being flouted (insider trading & artificially jacking up share prices). Harshad Mehta or a Ketan Parekh were convicted for the similar crimes isn't it?
If the share holding pattern is as per this report, then most of the Adani stocks should not even been listed in the stock market!

Originally Posted by Sran

Pretty much a hit job as some don't want investment inflow. Hindenburg is known to manufacture negative news to influence their short positions. ...

You make the point that Hindenburg is in it to make money. Of course they are! This is their business model.

Looking at their recent response, they seem to be quite sure of taking this head on. I suppose the Adani's (if they believe they are being misrepresented), will issue a public rebuttal.

[V.Narayan]

Originally Posted by Sran

The report quotes <---->

Dear @Sran, Appreciate your providing hard data to build your point of view. That is much appreciated at least by folks like me. Hence my thanks to your post even though my views differ. Your post is a lot better than posts which merely offer a moralistic rant with no data. Permit me to digress from your point of view however.

All,

That Hindenburg is no saint is known to the industry. The notice he has put out shared by member @deetee in the post above is their classic taunting/baiting style. No group they write on is obliged to respond. From Hindenburg's point of view he has met his objective of making money by shorting the stock and they pursue this as a business model. We should not fool ourselves that Hindenburg is here to reform the world.

Where Adani's go their market cap rising from US$ 100bn to US$280 bn in 18 months beggars belief because it is not as if their earnings grew 2.8X or any number close to that. All of that came from an already deeply stretched Price-Earnings multiple being stretched beyond its limits from here to planet Uranus and beyond. And how did this happen? This is where in my opinion there is some very serious & sophisticated price management at play. We won't go into apparent use of heft, floor management & influence in several RFPs and acquisitions as that would go against forum rules but those who read the papers and between the lines know. Sad but true.

What will be the end result - some damage control by Adani; some softening of their debt:equity; some footwork by those close to the group; infrastructure projects will continue largely unfettered; Adani Group will become a few ounces more careful with their brazenness and Hindenburg will seek its next target. Don't expect anything dramatic.

Originally Posted by whitewing

You make the point that Hindenburg is in it to make money. Of course they are! This is their business model.

This is like saying that the business model of an industrial group is to buy out politicians and win contracts as a consequence and say that is okay. Hindenburg & their like, hedge funds et al have been "justified & legitimized" by the American investment banking industry because they help the super rich get richer. We can agree to disagree. :-)

[Vishal.R]

I feel this is good for Indian markets in longer term, in either case, even if Adani shows sustainable real business growth in longer term (which fery few expects) or it will decrease market's dependency on Adani (what we call "fail fast" in software)

[RoadTiger]

As a seasoned financial professional the real mysteries to me are :

1. the stratospheric rise in share prices of Adani group shares over the last 2-3 years (Folks looking at it from a political angle need to remember that from 2014 to 2020, nothing extraordinary happened to Adani group shares) - To be fair, its not unprecedented though - dot com and more recent start-up valuations had no fundamental basis. Often, its the greater fool theory - people buy because they see momentum in the stock and promise of short term returns. This was best seen when Adani bought over ACC, Ambuja and NDTV recently - the shares rose very significantly overnight in the anticipation of being part of the Adani group. This generally turns out badly - once the tide turns and speculators realize the stock no longer has the 'midas touch'. However, there could be every possibility of market manipulation too. Quite in agreement with V.Narayan's suspicion of sophisticated price mgmt

2. the very high levels of debt most Adani companies carry on their books - Again to be fair, companies in the infrastructure sector have historically had high debts from time-to-time. Seasoned investors would know about power companies around the 2007-8 time frame that took on a lot of debt and when economic stress followed and power demand didnt rise as per expectations (among many other factors) power sector projects had a hard time repaying debt. Difficult to say if banks are implicitly/ explicitly feeling political pressure. Just that - Indian banks have come a long way over the last 8-9 years in terms of improved processes, governance & management esp of state run banks.

It also may not be a complete coincidence - from a geopolitical standpoint - that the BBC documentary shows up nearly 2 decades after the fact and that a US based firm targets Adani group right before one of its flagship companies' follow-on public offering (FPO). There are diplomatic theories around 'reward' for taking a non-popular stand around the Ukraine conflict, without involving the respective Govts. Hit where it hurts - without the optics of Govt action

All possibilities at play and I view most corporates (incl. Adani & Hindenberg) as no saints - truth hopefully will reveal itself at some stage.

[thanixravindran]

Originally Posted by RoadTiger

It also may not be a complete coincidence - from a geopolitical standpoint - that the BBC documentary shows up nearly 2 decades after the fact and that a US based firm targets Adani group right before one of its flagship companies' follow-on public offering (FPO). There are diplomatic theories around 'reward' for taking a non-popular stand around the Ukraine conflict, without involving the respective Govts.

All possibilities at play and I view most corporates (incl. Adani & Hindenberg) as no saints - truth hopefully will reveal itself at some stage.

Well said and exactly mirror my thoughts. For me, the events of past week and this week indicates that the world's most populous nation has entered the election season already and I believe all this is part of the narrative building. So expecting more in the coming months.

[deetee]

Some questions to ponder:

1. Of all the popular companies that they can research and expose, why did Hindenberg choose Adani group? Remember there is no smoke without fire.

2. Hindenberg openly admits they shorted the stock (although, indirectly - God knows how) and times the report before the FPO and the budget. How foolish should they be to do that if they don't believe they have solid evidence on their side? There maybe a much larger motive behind the writings considering the timing of this revelation. But that should not distract from the core allegation of large scale financial fraud.

3. If there are allegations of fraud happening in this public listed company, will SEBI investigate this deeply or will it mop under the mat by seeking a self explanation from the accused?

Edit : While all are discussing about this report now (mostly because of the timing and suspicious motive), "The Print" made this video 5 months back which went much less noticed:

https://www.youtube.com/watch?v=EFDXD3TY2jM

[GutsyGibbon]

Originally Posted by RoadTiger

It also may not be a complete coincidence - from a geopolitical standpoint - that the BBC documentary shows up nearly 2 decades after the fact and that a US based firm targets Adani group right before one of its flagship companies' follow-on public offering (FPO). There are diplomatic theories around 'reward' for taking a non-popular stand around the Ukraine conflict, without involving the respective Govts. Hit where it hurts - without the optics of Govt action
All possibilities at play and I view most corporates (incl. Adani & Hindenberg) as no saints - truth hopefully will reveal itself at some stage.

If I understand your post correctly - That is quite some conspiracy theory here to stretch it and insinuate that US govt is taking a hit at India/Adani through Hindenburg for India's stand on Ukraine. The credit rating and outlook about Adani from Fitch came out last year in Feb 22. The video from the print (Shekar Gupta) that was posted here by user deetee is from 5 months back. Their research probably goes a few weeks further behind. It says some of the same things in this report. Nobody has control over when things snowball, and people take notice. I am not buying the timing logic completely.

There are some leaks that corporate affairs can address with a patch. Like a small roof leak. Then there are some that seem like a crack in the dam retaining wall. This time investors seem to have gotten spooked. Is it a tiny roof leak, or a crack in the dam - time will tell.

[extreme_torque]

Originally Posted by Sran

The report quotes MP Mahua Moitra and that alone should be sufficient to discard it.

I dont understand why. Why we shoot the messenger here?

Originally Posted by Sran

Pretty much a hit job as some don't want investment inflow. Hindenburg is known to manufacture negative news to influence their short positions. Hindenburg research is a fairly new investment firm with 5 employees along with owner Nate Anderson. Hindenburg research and Nate themselves are under American Justice Department investigation for unfair trade practices and market manipulation including, “spoofing”—essentially flooding the market with fake orders to drive a stock price up or down—and “scalping,” wherein activist shareholders cash out positions without disclosing it. (https://www.forbes.com/sites/sergeik...h=62a4facb78fc). They are a cartel of traders that includes among many others like Melvin Capital and its founder Gabe Plotkin, Sophos Capital Management, Sprucepoint, Citron and Anson Funds who earn money through short selling. Anyone with with an IQ over room temperature could have told that Nikola was a scam. Comparing a conglomerate to an EV startup is malarkey. Raising capital is hard for infrastructure work and world over infrastructure assistance is provided by banks supported through respective governments. Billionaires are the most efficient way to deploy capital.

I would just say one thing - Shorting a stock to earn money is legal. End of the story.

Nikola was a very elaborate fraud with massive events (look up Nikola world on youtube) and trucks which actually looked good, an office with people and machines etc. It fooled most of the mainstream media for quite some time which is why I have no respect what so ever for either the mainstream finance media or some of the so called wall street analysts. It fooled GM too but then I would be surprised if GM is able to survive this decade but that is a story for another day.

Originally Posted by Sran

P/E ratios are high for many companies worldwide.

Company PE Ratio Market Cap

Insulet 1,207.08 $20.12 billion

JD.com 682.08 $83.83 billion

Constellation Brands, 654.10 $42.25 billion

Salesforce 557.75 $156.17 billion

Global Payments 507.66 $30.20 billion

ServiceNow 453.30 $90.65 billion

Pinterest 373.20 $17.72 billion

Dynatrace 368.94 $10.62 billion

Alibaba Group 300.63 $318.44 billion

BioMarin Pharmaceutical 276.26 $21.52 billion

MercadoLibre 210.55 $56.87 billion

DexCom 191.71 $40.17 billion

First Solar 191.21 $17.94 billion

Neurocrine Biosciences 190.88 $10.46 billion

Welltower 160.57 $34.90 billion

Match Group 153.16 $14.12 billion

SolarEdge Technologies 148.04 $16.80 billion

Prudential Financial 141.01 $37.77 billion

Brookfield Infrastructure Partners 137.77 $16.42 billion

Axon Enterprise 132.54 $13.68 billion

T-Mobile US 121.37 $184.22 billion

Live Nation Entertainment 110.76 $17.90 billion

International Business Machines 102.75 $127.26 billion

Enphase Energy 101.12 $28.59 billion

AstraZeneca 99.45 $206.48 billion

Progressive 96.08 $79.26 billion

Equinix 94.09 $66.61 billion

Burlington Stores 90.08 $14.64 billion

Amazon.com 89.20 $991.40 billion

NVIDIA 82.23 $481.14 billion

Intuitive Surgical 64.33 $86.16 billion

Walt Disney 62.86 $197.17 billion

It is not as black and white as you propose it to be. Taking example of Salesforce, P/E is not a great metric for companies that reinvest their earnings for growth. (AKA most growing software companies). Look at Ebitda and Free Cash Flow. Or their forward P/E which is 29.34 as of today.

With Adani, not only are their P/E ratio's too high for the industry they are in, they have negative cashflow in 4 out of 7 of their entities.

[Sk8r]

Another informative video on this topic. May not be as interesting as conspiracy theories out here , but this guy ( Akshat ) is usually solid

https://youtu.be/LLljt2SUqtQ