How Adani lost $100 billion?

How Adani lost $100 billion?

On January 24, an American investment research firm published a report suggesting that Adani’s company had been inflating its numbers for years using a variety of dishonest methods. The main charges in the 100-page paper are that Adani’s associates have utilized a network of obscure, offshore shell companies to acquire and sell shares in his companies, inflate their prices, or provide them cash infusions to make them appear more creditworthy.

According to the investment research firm, Hindenburg held short positions on the Adani Group’s US-traded bonds and non-Indian-traded derivatives at the time it was published and stood to profit if investors ditched Adani. The charges were strongly denied by Adani Group, but investors swiftly withdrew. By February 8, the $236 billion company  was valued at just $127 billion. Additionally, it had a big devastating impact on their image.

Read more about short selling : https://www.schwab.com/learn/story/ins-and-outs-short-selling

Hindenburg Research, the New York-based investment firm, sounded a bullish note on India specifically, calling it “an emerging superpower with an exciting future” while labeling the Adani Group “the greatest fraud in financial history.”

Examine Adani’s business

The billionaire’s businesses are involved in a variety of industries, including airports, roads, water management, data centers, solar manufacturing, defense and aerospace, edible oils and foods, mining, integrated resource solutions, and integrated agri products. Adani owns the mines from which the coal is extracted, which is then transported to the furnaces in his power plants using his ports and railroads. When people cook dinner on stoves powered by Adani gas with Adani cooking oil, wheat, and apples, their generated electricity travels on his transmission lines into homes constructed with cement his company manufactures. They may then plan future trips using flights between his airports. No other person in modern Indian history has established such a presence.

watch the entire video :

Since Mr. Modi has been in office, Mr. Adani has actively positioned his business as being in the government’s service. When Hindenburg attacked his conglomerate, it issued a nationalistic defense, claiming its critics of causing “anguish for Indian citizens.” But the Modi and Adani organizations’ close ties to one another are not typical of 21st-century Indian capitalism.

According to opposition critics who charge that Prime Minister Narendra Modi’s administration has granted improper benefits to a company run by billionaire tycoon Gautam Adani, Ruling party stated on Wednesday that “lies and abuse” directed at the prime minister will not be tolerated.

In his roughly 90-minute speech to the Parliament, Modi mostly listed the accomplishments of the government while avoiding to mention the Adani Group, which is currently under criticism.

Final Notes :

The company’s stock lost more than $100 billion in couple of days. The persistence demonstrates the magnitude and apparent sturdiness of the larger Indian economic landscape. A small New York trading firm’s allegations of fraud and stock manipulation caused Adani to plunge dramatically, although it is a scandal but a drop in the enormous Indian bucket. About 1.5 million businesses are now based in India, which also has a robust stock market with comfortable reaching of $3 trillion to $3.5 trillion. It would be a terrible scenario not only for India and the rest of the world if these reports were able to wipe away significant sums of money from the market.