The Adani Group-Hindenburg Spat
Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.
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The Hindenburg report on the Adani group is nothing new. There have been murmurs about the group having spread itself too fast and too thin in the past too. But Hindenburg (just a 5-year organization based in the US) claims that it conducted a detailed study on the group for the last two years and has come up with some allegedly damning material that proves that the group's bubble is going to bust soon. It is a trading outfit that has now started short selling Adani shares. The Adani group, on its part, has dismissed the report as being 'malicious' and has issued an internal report, which is a point-by-point rebuttal that claims that all is well with the group. It further said that the timing of the Hindenburg report suggests that it has vested interest to scuttle the Rs 20000cr Adani Enterprises, the flagship company of the group, FPO that opened on January 27. In response to Adani's charges, Hindenburg has dared the group to sue it in the US.By Linus Garg
First publised on 2023-01-27 06:58:29
About the Author
Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.
View all posts by this Author
When someone grows so big so fast, there always will be allegations that something is amiss. But it has to be considered that the Adani group has chosen its sectors well and has invested wisely. It may have stretched itself thin but the fact is that it is managing well and unless there is a run on its shares (like what is happening after the Hindenburg report), there is little chance of the group going bust. Further, whatever Hindenburg might think of itself and the effort it has put in bringing out the report against the Adani group, the fact is that it is a relatively new organization and unless what it has put out is seconded and supported by others, it will remain just one organization's view. It is also a fact that in the sensitive Indian stock market that thrives on rumours and is highly sensitive to such reports, the Adani group will have a hard time in controlling the fall of its shares. This will be extremely damaging, both for the Adani group and the market sentiment, in the short term.
