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India's Adani slammed by $45B stock rout

53 points by SeanAnderson 4y ago

SeanAnderson 4y ago
A couple of days ago Hindenberg broke a story indicating they felt Adani was engaging in significant fraudulent activity, https://news.ycombinator.com/item?id=34513802 https://news.ycombinator.com/item?id=34513802 The market appears to be agreeing with their analysis. In the past day Adani is down nearly 20% against a >3T market cap. It will be very interesting to see how this affects overall confidence in India's markets going forward.
- hitekker 4y ago
  Interesting that the top comment of the thread you posted attempts to minimize Adani's culpability. It reminds me when the FTX story broke Coindesk and was posted to HN. The top commenter there was trying to convince everyone there's nothing to see and the concerns were overly dramatic.
  - alephnerd 4y ago
    I wouldn't call that minimizing. That's just how the nexus between politics and industry works in India. The kind of business practices Adani did is very common in India, and they 100% will get bailed out by the LIC or other PSUs, if not for bhaichara but for the fact that the optics of "Firangi" bankers attacking a Desi company and "insulting" Indian economic sovereignty are bad. Throw in some references to the East India Company, the Brits, and American sanctions against India in the 70s and 90s and that makes it easy to spin this story into one of economic nationalism. Welcome to the developing world. edit: Also, this sadly is not the first nor the last instance of this nexus arising in Indian politics. Not to minimize the Adani scandal, but you a similar issue arise in the Manmohan Singh govt (the rise and fall of DLF), the Vajpayee govt (IAI/Rafale's Barak Scandal), and so on and so on. That said, usually, when news like this comes up in India, it tends to herald the looming end of a political era.
  - potamic 4y ago
    This is something I see so often it boggles the mind. Wealthy, powerful people tend to have fans. Any time there's an accusation against them, there's a bastion of common people who come to their defense, despite being potentially affected by the accusations. If anything, the common man should be putting wealthy, powerful people under even bigger scanner and scrutinising their every move, because one bad move can have large implications for them.
reacharavindh 4y ago
I had a tiny investment in ADANIENT stock that I sold the moment I read about the Hindenburg report. So, I contributed to the $45B! The thing is Indian business environment is a big of a quagmire. It significantly helps that the legal system is wildly inefficient (and prone to influence by the powerful). Just look at the famous scandals and the frauds that got away with it… The thing is the market regulator is still holding the cards. If any of these allegations are proven true, the key question would be whether the regulator failed at their job or worse colluded to let it happen. If so, it’s be a disaster for the Indian stock market. If not, I suppose frauds being frauds I guess.
- 2Gkashmiri 4y ago
  i do legal compliance/litigation for indian businesses. there are a couple of things at play here (talking about small business) 1. taxes and compliance is VERY VERY HARSH because the govt expects people to fuck them over taxes. 2. people DO fuck the govt over taxes. there is a normal parallel cash economy that saves a tonne of indirect taxes at the start and direct income tax at the end of the financial year. 3. businesses have this concept of "why should we pay for compliance/ books and have that work as evidence against us if things go south when we can just bribe the investigating officer and our job will be done.\ 4. for the most part, "paper" is king. online works for most part but because of technical inefficiencies, paper is allowed and that makes bribery a viable solution. 5. i know of a guy in delhi-ncr who apparently advertises that he "has contacts with all the GST departments of the area and if you have any problem with the department and you need settlement, you call me. ". He recently bragged to one of his teachers about earning "1 lac a day doing this broker job". 6. there is never ending cycle of businesses finding ways to steal tax money, govt finding out and plugging them and the cycle starts again. this has the unintended consequence of a genuine business owner sees no "value" in being genuine when it actually saves them cash. 7. we do audits but i know what kind of stuff we check so being an auditor, i do not "trust" an audit report of another auditor so you can say that about the profession. ( this applies to big and small businesses the same) 8. every party is greedy and the other party knows and tries to fuck one another. that is the gist of it. 9. "meteoric rise" is absolute bullshit. 10. people "hope" that people like adani are better because they have a tonne of money so they should be better than us so we should fuck with out customers/suppliers/employees/govt because that is the only way to become like that guy. 11. everyone has known that adani is being helped by modi govt, same for reliance but no one sees that as a risk. 12. you join BJP, "all your sins will be washed away". i have seen that in a lot of places on the streets. i don't know... i am ranting
ilrwbwrkhv 4y ago
[flagged]
- jonwachob91 4y ago
  Every country has issues with scammers and fraudsters. India is hardly alone on this issue.
  - ilrwbwrkhv 4y ago
    I haven't seen the same level of scamming in other countries with a similar GDP.
    - thunkshift1 4y ago
      Yea, right
- MomoXenosaga 4y ago
  [flagged]
  - lupire 4y ago
    Castes and discrimination is terrible, but racism doesn't particularly correlation with accounting fraud. Guilds accept new members, and some of the wealthiest modern people are guild members (doctors, lawyers, actors).
zxienin 4y ago
Pretty well played by Hindenberg. This rout directly benefits their short position. Invest 2 year to create enough mayhem in market, to cash your chips. Not bad for a business model.
known 4y ago
[dead]

53 points by SeanAnderson 4y ago

A couple of days ago Hindenberg broke a story indicating they felt Adani was engaging in significant fraudulent activity, https://news.ycombinator.com/item?id=34513802 https://news.ycombinator.com/item?id=34513802 The market appears to be agreeing with their analysis. In the past day Adani is down nearly 20% against a >3T market cap. It will be very interesting to see how this affects overall confidence in India's markets going forward.

hitekker 4y ago
Interesting that the top comment of the thread you posted attempts to minimize Adani's culpability. It reminds me when the FTX story broke Coindesk and was posted to HN. The top commenter there was trying to convince everyone there's nothing to see and the concerns were overly dramatic.
- alephnerd 4y ago
  I wouldn't call that minimizing. That's just how the nexus between politics and industry works in India. The kind of business practices Adani did is very common in India, and they 100% will get bailed out by the LIC or other PSUs, if not for bhaichara but for the fact that the optics of "Firangi" bankers attacking a Desi company and "insulting" Indian economic sovereignty are bad. Throw in some references to the East India Company, the Brits, and American sanctions against India in the 70s and 90s and that makes it easy to spin this story into one of economic nationalism. Welcome to the developing world. edit: Also, this sadly is not the first nor the last instance of this nexus arising in Indian politics. Not to minimize the Adani scandal, but you a similar issue arise in the Manmohan Singh govt (the rise and fall of DLF), the Vajpayee govt (IAI/Rafale's Barak Scandal), and so on and so on. That said, usually, when news like this comes up in India, it tends to herald the looming end of a political era.
- potamic 4y ago
  This is something I see so often it boggles the mind. Wealthy, powerful people tend to have fans. Any time there's an accusation against them, there's a bastion of common people who come to their defense, despite being potentially affected by the accusations. If anything, the common man should be putting wealthy, powerful people under even bigger scanner and scrutinising their every move, because one bad move can have large implications for them.

reacharavindh 4y ago

I had a tiny investment in ADANIENT stock that I sold the moment I read about the Hindenburg report. So, I contributed to the $45B! The thing is Indian business environment is a big of a quagmire. It significantly helps that the legal system is wildly inefficient (and prone to influence by the powerful). Just look at the famous scandals and the frauds that got away with it… The thing is the market regulator is still holding the cards. If any of these allegations are proven true, the key question would be whether the regulator failed at their job or worse colluded to let it happen. If so, it’s be a disaster for the Indian stock market. If not, I suppose frauds being frauds I guess.

2Gkashmiri 4y ago
i do legal compliance/litigation for indian businesses. there are a couple of things at play here (talking about small business) 1. taxes and compliance is VERY VERY HARSH because the govt expects people to fuck them over taxes. 2. people DO fuck the govt over taxes. there is a normal parallel cash economy that saves a tonne of indirect taxes at the start and direct income tax at the end of the financial year. 3. businesses have this concept of "why should we pay for compliance/ books and have that work as evidence against us if things go south when we can just bribe the investigating officer and our job will be done.\ 4. for the most part, "paper" is king. online works for most part but because of technical inefficiencies, paper is allowed and that makes bribery a viable solution. 5. i know of a guy in delhi-ncr who apparently advertises that he "has contacts with all the GST departments of the area and if you have any problem with the department and you need settlement, you call me. ". He recently bragged to one of his teachers about earning "1 lac a day doing this broker job". 6. there is never ending cycle of businesses finding ways to steal tax money, govt finding out and plugging them and the cycle starts again. this has the unintended consequence of a genuine business owner sees no "value" in being genuine when it actually saves them cash. 7. we do audits but i know what kind of stuff we check so being an auditor, i do not "trust" an audit report of another auditor so you can say that about the profession. ( this applies to big and small businesses the same) 8. every party is greedy and the other party knows and tries to fuck one another. that is the gist of it. 9. "meteoric rise" is absolute bullshit. 10. people "hope" that people like adani are better because they have a tonne of money so they should be better than us so we should fuck with out customers/suppliers/employees/govt because that is the only way to become like that guy. 11. everyone has known that adani is being helped by modi govt, same for reliance but no one sees that as a risk. 12. you join BJP, "all your sins will be washed away". i have seen that in a lot of places on the streets. i don't know... i am ranting

ilrwbwrkhv 4y ago

[flagged]

jonwachob91 4y ago
Every country has issues with scammers and fraudsters. India is hardly alone on this issue.
- ilrwbwrkhv 4y ago
  I haven't seen the same level of scamming in other countries with a similar GDP.
  - thunkshift1 4y ago
    Yea, right
MomoXenosaga 4y ago
[flagged]
- lupire 4y ago
  Castes and discrimination is terrible, but racism doesn't particularly correlation with accounting fraud. Guilds accept new members, and some of the wealthiest modern people are guild members (doctors, lawyers, actors).

zxienin 4y ago

Pretty well played by Hindenberg. This rout directly benefits their short position. Invest 2 year to create enough mayhem in market, to cash your chips. Not bad for a business model.

known 4y ago

[dead]