[buzzy_boy]

In finance, the old adage "if it's too good to be true, it often is" applies.

Adani group of companies have seen an unprecedented rally over the last 3 years, and none of these were backed by the underlying fundamentals. Normally, similar trends are only observed in early-stage, high-tech companies - where a lot of speculation is necessarily involved.

The scale of these allegations, if they are true, is massive, and could threaten the stability of our financial system. The impact will be borne by the working class who were saving for their first home, children's education, parents' health expenses, and retirement.

I hope that the authorities act swiftly, and address any case of fraud with an iron-hand.

[sgmuser]

My first stock was Adani Ports IPO! This was recommended by my friend when I never heard about this company first of all. But I thought Ports business is usually considered a solid one to start with. But in these 2 decades or so, the way they grew especially, in the last decade, is something, I felt it is not organic. There were too much hype in whatever they did. Now, I started to respect Reliance, as they are far better in the long term in their ventures. When Adani forcibly took over NDTV then my doubts are all confirmed. For me, a casual investor who believes in fundamentals, Adani is a disaster waiting to happen. Especially, the auditor they have is something I just couldn't digest, if it is really true.

[Nissan1180]

The market rout today will hurt many companies. I read on Reddit that the group’s bonds have been shorted in the US, which will affect the current and future fund raising abilities of the company.

[Siddarth_Ramani]

Originally Posted by V.Narayan

But.....the world is only shades of grey....

I agree with Mr. Narayan here. Hindenburg may be good at their research, but they are no saint. Their business model is structured to win at the cost of others, good part is they do not hide the fact. I read the report where they have given a full disclosure on their short positions.

Some people are just hyping about them. I just want to say one thing to these folks, if Hindenburg wins, it WILL impact you and in a big way.

[deetee]

ADANI FPO, claimed to be largest in Indian retail market, opened today with a price band of 3,112-3,276 per share. Meanwhile, respective stock tanked today and ended at 2761. What a way to go for an FPO! Market is driven by sentiments. Unless there is an underlying negative sentiment on a massive scale, no one can trigger an outburst of this proportion. The blame should not be on the trigger if some one is caught unaware.

Bill Ackman's response to the ongoing tussle:

If the report is conspiracy against Adani or the Nation as a whole, then the top Entrepreneurs in the country would have come out condemning the report (or the timing as many here criticize). Silence shows that every one wants to distance themselves from this. Worth pondering why.

Originally Posted by Siddarth_Ramani

Some people are just hyping about them. I just want to say one thing to these folks, if Hindenburg wins, it WILL impact you and in a big way.

Repeating about Hindenburg only highlights them and distracts the focus from core problem. I think that above statement should have been:
"I just want to say one thing to these folks, if Adani fails, it WILL impact you and in a big way."

It is not success of some foreign entity we should be concerned so much, it is the repeated failure of our system that we should be talking about.

[dragonfire]

Maybe the time is ripe to buy Adani shares. The stock price dip should be temporary. The govt will become the savior. Means more govt contracts will go the Adani way - cos the guys in power owes a lot to Adani. And not the other way around as some people believe.

This.... unless this is a concerted attempt to bring the whole circus down. Some people were questioning the timing of the now infamous documentary. They may have a point.

[bobbyblr]

Below is an video from Think School 6 months ago on Adani groups cash flow:

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

[RRU]

Very important thread and I am quite happy to read everyone's insight into Adani groups inscrutable, meteoric rise from nowhere.

As a fundamental investor - looking at the pristine financials of Yes Bank, I would always ask myself - "is it not too good to be true?" when even the likes of HDFC Bank had at times its own share of challenges. Checking about the bank's visibility at ground level never inspired confidence (part of the reason was its corporate focus vs retail) and the extremely skeptical person in me always regarded our financial media and analysts no more than a bunch of cheer leaders (never heeded to them - my bias). So, stayed away.

Adani group - did invest in Mudra Ports IPO just to cash in the frenzy - made money only to lose in Reliance Power IPO - LoL - lesson learnt. It was pure arbitrage.

On all the group stocks and the latest report alleging brazen scheme of stock manipulation and accounting fraud dating back a decade, it is unfortunate that a US-based forensic financial research firm had to debunk this. Well, it was always known that Adani group stocks (save the port business) are speculative, severely manipulated and defied all valuation fundamentals - most MFs stay away from these stocks. Of course, those who rode the tide and made money - great! I never believed in these and consciously stayed away. No regrets missing out "multi-baggers."

One reason I see why our own media and financial vigilantes never mustered courage to highlight vigorously about this group because of its proximity to the ruling political outfit and the ultimate leader. Whenever any of my friends would ask me about my view on Adani group stocks - I would say "I don't recommend but remember this groups' instruments have unwritten sovereign guarantee. Take your call."

I do not think the impact of this report will last long - things will go back to normal and the rise will continue as long as Big Brother is there. Hope the truth prevails and we are not in an Orwellian State!

[PearlJam]

This is the shareholding pattern of various Adani companies (courtesy: moneycontrol.com):

Adani Enterprises - FII: 15.39% Promoters: 72.63%
Adani Green Energy - FII: 15.14% Promoters: 60.75%
Adani Total Gas - FII: 17.44% Promoters: 74.8%
Adani Trans - FII: 19.32% Promoters: 74.19%
Adani Ports - FII: 13.77% Promoters: 65.13%
Adani Power - FII: 12.88% Promoters: 74.97%
Adani Wilmar - FII: 1.57% Promoters: 87.94%

As we see, Foreign Institutional Investors hold a relatively large %age of shares. Couldn't they, with all their sophisticated research, political connections, money power, and what not, see what Hindenberg has been alleging? Wouldn't it be in the interest of these FIIs to also rubbish the Hindenberg report, to preserve their investments?

Also, the promoters themselves are holding pretty huge stakes in their own companies - so it's not as if they are going scot free in the stock market deluge. I'm sure they would have realized that any controversies would affect them the most.

[SmartCat]

A friend of mine created this excel sheet - it shows the exposure of mutual funds to Adani group stocks. Overall exposure is just 0.3% of AUM (assets under management). Click on the image & zoom in if numbers are not clear.



Also, most of this investment is "forced" because Adani group companies are a part of various equity indices. By design, such mutual funds/ETFs need to invest a particular sum in Adani stocks. Also, some investments are a part of 'arbitrage funds' (no risk of capital loss here)

So for once, the mutual fund industry has been ahead of the curve. They have totally avoided investing in Adani group stocks.

[Hayek]

Originally Posted by PearlJam

As we see, Foreign Institutional Investors hold a relatively large %age of shares. Couldn't they, with all their sophisticated research, political connections, money power, and what not, see what Hindenberg has been alleging?

You obviously have not read the Hindenburg report. Not commenting on whether I believe it is right or wrong - that is irrelevant in any case. But the allegation is that many of the FII shareholders are not real investors - but fronts for the promoters who were manipulating the stock price. If that is true, they would have had no incentive to see anything.

[NetfreakBombay]

Is LIC throwing good money after the bad :

State-controlled Life Insurance Corp. of India is spending about 3 billion rupees ($37 million) as an anchor investor in a $2.5 billion new share sale by*Adani Enterprises Ltd.

This defies the logic. It is much cheaper to buy shares from secondary market (due to fall in last 2 days); as compared to FPO price.

https://economictimes.indiatimes.com...w/97378116.cms

[GutsyGibbon]

Originally Posted by NetfreakBombay

Is LIC throwing good money after the bad :
This defies the logic.

Perhaps Adani has a LIC policy and they are throwing him a lifeline
J/K

[Spaced Out]

Originally Posted by GutsyGibbon

Perhaps Adani has a LIC policy and they are throwing him a lifeline
J/K

You may have nailed it though.

[ToThePoint]

Originally Posted by GutsyGibbon

Perhaps Adani has a LIC policy and they are throwing him a lifeline
J/K

After all LIC = "Zindagi Ke Saath bhi Zindagi Ke Baad bhi"