Indian Economy News & Discussion - Nov 27 2017

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Pratyush
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Pratyush »

vera_k wrote:Posting here since wrongdoing by Adani will have a large impact. Hindenburg's prior short attack on EROS proved accurate.

Adani research
I have read this article.

Stock manipulation alone doesn't increase stock valuation nearly 4000% for some of the entities of the group over a period of 3 to 4 years.

Debt and debt servicing is a serious concern. But as long as revenues are capable of serving the debt. It should be an issue.

This is an entity that holds a short position in Adani group. So the report has to read from that POV.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Cyrano »

There must a reason why Modi keeps a certain distance from Adani in public though it's often alleged that Adani is close to him.

I've heard a few speeches of Adani - he doesn't come across as someone passionate about infra and what it can do to boost a country's economic activity. His company is over leveraged in infra and energy sector which depends on global macro trends and good graces of successive govts. He is putting his fingers into all kinds of pies in which he has neither experience nor any synergy. When I get that feeling about ANY company's leader, especially a close family run company, I would not put money into its stock or into related enterprises.

The report may be a motivated hit job, especially when they quote Mahua Moitra, but I wouldn't dismiss the report just for that. It makes clear allegations and names entities and people. Ignore it if you wish.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by JTull »

Adani isn't doing anything that a large Private Equity player wouldn't do. The key difference is that PE firms won't do greenfield investments as Adani is also doing.

In order to understand this fully, I'd suggest you look at these attacks, including those by Church elements in Kerala, with the same lens as the Sterlite story.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chetak »

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a_bharat
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by a_bharat »

Some twitter user posted chatGPT summary of Hindenburg report on Adani:

Image

https://twitter.com/Prashanth_Krish/sta ... 37/photo/1
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by JTull »

That trailing comment is a gem!
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by gakakkad »

Hindenberg bitten way more than it can chew . They did have success in shorting obviously dubious companies like Nikola. But what a short seller must understand is that there is a difference between tangible assets like Ports , refineries , cement manufacturing units etc and fairy dust like crypto and social media followers. Adani may be over leveraged , and frankly most large companies are to an extent . But they have massive tangible assets and pretty legit operations. Carmichael mines has repeatedly come up. Won't be surprised if someone else (western companies like Rio tinto ,glencore etc ) might be eyeing the mines. It may cause the stock prices to dip a little . But it ll be business as usual...And if a short fails , there are consequences , immediate and delayed both.. the bit about 'silencing' journalist is obviously not Germaine and clearly propaganda. Tons of big businesses are still family operated ..nothing new there... and there are many reasons , legal, tax etc to start shell companies... again nothing to see there...very curious what instruments do they have a short position. And I wonder how much the short position actually is...
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vijayk »

gakakkad wrote:Hindenberg bitten way more than it can chew . They did have success in shorting obviously dubious companies like Nikola. But what a short seller must understand is that there is a difference between tangible assets like Ports , refineries , cement manufacturing units etc and fairy dust like crypto and social media followers. Adani may be over leveraged , and frankly most large companies are to an extent . But they have massive tangible assets and pretty legit operations. Carmichael mines has repeatedly come up. Won't be surprised if someone else (western companies like Rio tinto ,glencore etc ) might be eyeing the mines. It may cause the stock prices to dip a little . But it ll be business as usual...And if a short fails , there are consequences , immediate and delayed both.. the bit about 'silencing' journalist is obviously not Germaine and clearly propaganda. Tons of big businesses are still family operated ..nothing new there... and there are many reasons , legal, tax etc to start shell companies... again nothing to see there...very curious what instruments do they have a short position. And I wonder how much the short position actually is...
Yes. For startups or small BioTech companies which work on one product and listed in NASDAQ, this kind of thing can be fatal. Even this scam of shorting worked in cryptos. For companies that have legitimate business and physical assets, it will only have short term impact. This will be used by dumbo Modi haters to send whatsapp messages to gullible people
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chetak »

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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Cyrano »

Hindenburg welcomed the suit, dared Adani to attack it in the US also which will invite lot of disclosures...
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Suraj »

If Adani is smart, they'll deal with the matter on home turf. Nikola was listed as a famous revelation of theirs. I'm not sure what's so special about that - Nikola was a known smoke and mirrors show. Adani on the other hand are an enormous heavy industrial conglomerate with a portfolio of hard assets rivaling some chaebols.

FYI, Hindenburg themselves are a 5-year old company with half a dozen employees, so their scope for investigative research is similarly limited. They are also on the DoJ's radar for short selling fraud, and an active investigation is on at the moment:
Vast DOJ Probe Looks at Almost 30 Short-Selling Firms and Allies
Prominent firms and their leaders mentioned in the Justice Department’s requests to some market participants include Melvin Capital Management and founder Gabe Plotkin; Orso Partners and Nate Koppikar; Sophos Capital Management and Jim Carruthers; as well as Kerrisdale Capital Management. The list also includes well-known researchers such as Nate Anderson and his Hindenburg Research, as well as Fraser Perring and his Viceroy Research.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by yensoy »

For a moment let's take Hindenburg out of the picture. They are only a messenger.

Is Adani a house of cards? As others have said, yes maybe they are over-leveraged. Hell they may even be issuing fraudulent stock and building a castle out of thin air. Is that problematic? I'm not so sure - if managed properly and if the investments are in the right places, these bets might actually work out. Remember Reliance? That whole empire was built on all sorts of fraud or allegations of it. Yet today we have a sound, professionally run company (Mukesh' side of it) delivering stuff that people want - hard infra, petrochemicals, goods and services. The Adani story is very similar. It is an audacious bet by someone who had little to lose; it may have political backing which only makes it a safer bet.

Remember, modern China itself was built by an over-leveraged system. Those who bet against any sector of the Chinese economy would have been wiped out (till recently) - housing, infra, financials etc. And that is while China was/is in a much bigger bubble than ours, with very little transparency, no information disclosure and no legal recourse.

I couldn't do what Adani is doing, but someone has to have a grand vision and take a big bet and that person is Adani. If industry went only with sound business practices and safe investments, we would revert to 3% growth.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by sanjaykumar »

I have no idea about Adani but certainly there is flagrant stock manipulation here. By Hindenburg.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vera_k »

This was Hindenburg's case against EROS a few years ago. That short proved correct, and the stock was eventually delisted. They are following the same script with Adani, particularly where they go after the capability of the auditors.

Eros International 1
Eros International 2
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vijayk »

But the plot may be that if Adani can be brought down, people will blame Modi and can be defeated in 2024.
I hope Govt. insulates and is forcing them to reduce their debt like they did with Ambanis

Can Adani's get equity into ports/airports and reduce their debt?

I can see the pain on every Modi hating jihadi/missionary/white worshipping castiest/COMMIE scoundrel. Only one word on their lips - Adani Adani Adani.

Two months ago, INR is going down like Srilankan ruppe and Forex has gone down. They were hoping for Pakistani situation.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by JTull »

Anyone who's on the other side of these short sells will need to cover it in local market. Eventually the street will know who's that bank(s). Single stock futures are notoriously difficult to roll every month for long periods at a stretch.

Tweaking margin rules temporarily to prevent market squeeze (to protect other investors) will rapidly make this trade very expensive. Such tweaks are not uncommon.

One thing I've learnt in last 2 decades is that you rarely can get on the wrong side of govt or regulators, and come away smiling.

Hindenburg is taking on Indian market participants as much as Adani. If institutional Investors think that drop in value is enough to buy more, we could see a tough lesson being learnt publicly.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by JTull »

Another suspicion is that Hindenburg is trying to derail Adani Enterprise FPO, forcing Adani to roll expensive debt. They may be long credit spreads as well short the equity. I don't have Bloomberg any more so don't know how much debt is coming up for refinancing.

I'd like to see Adani come out of this with minimal pain. It'll make them more resilient.

We're in too-big-to-fail category. It'll be a shame if govt has to step in because that'll strengthen those who believe in collusion theories between Adani and Modi govt.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Atmavik »

^^ too Big to fail is never good , they are into many things now including Women’s IPl . But their core business is solid. Munda port is the top port in a growing economy
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by hgupta »

Adani needs to sue in Indian courts, not American courts. American courts have no jurisdiction over in India.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Suraj »

JTull wrote:One thing I've learnt in last 2 decades is that you rarely can get on the wrong side of govt or regulators, and come away smiling.

Hindenburg is taking on Indian market participants as much as Adani. If institutional Investors think that drop in value is enough to buy more, we could see a tough lesson being learnt publicly.
It’s also a week before a budget which will probably bet heavily on capital investment benefiting heavy industry and infra conglomerates like Adani. For a company holding short positions that seems very inadvisable in terms of timeline.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by gakakkad »

https://www.reuters.com/business/bill-a ... 023-01-27/

They seem to have hedge fund backing. Bill Ackman (most famous for backing the extremely dubious Valeant Pharmaceuticals a few years ago ) may be one of the people financing the short. He comes across as a gentleman who believes he is way smarter than he actually is. He was pretty disgraceful during the valeant mess. If I had access to that kind of data , I would be most interested in knowing if Jim Simons or Carl Icahn have taken a position in this thing .

I do have a political theory about the whole thing that i ll post in detail in some other thread once I have time.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vera_k »

Valeant was one of Ackman's worst investments, one where he was bested by Quadir. Watch the Netflix documentary if you get a chance to understand where the shortseller's coming from.
A Short Seller named Assassin

IMO Adani has real world projects as pointed out. Far as I can tell, the short thesis is based on using low interest debt to buy up stock that then results in a higher valuation, which in turn allows for more borrowing that is then used to buy up more stock. If this is not going on, the short will fail, otherwise sooner or later they will run out of people willing to lend money to keep this cycle going.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Cyrano »

A group that didn't inspire confidence for me a few years ago was Sahara. We know how that ended.

In a recent webcast covering multiple topics, (see Rafale thread) it was claimed that Adani group bid for Haifa port and its bid was 5 times the nearest competitor. While this is hard to verify, the need to show positive business news constantly to keep stock price high for further leveraging could push a company to make bad decisions.

When I see a company - any company - with huge debt putting its fingers in too many pies where there are established players its always a bad sign. I mean there are entry barriers, established brands, relationships with clients and suppliers, experienced talent, market reach etc you have to take on frontally to make any headway. The playing field is never level.

To penetrate and upstage a market you need to turn the playing field upside down to grab some advantage over the others. It can be done by tech innovation to produce better and cheaper or market access - expand customer base, create demand etc. To some extent being in Infra, Adani or any group like it can circumvent this by getting a govt license or long term lease of some public asset (mining, ports, air ports, telecom spectrum, roads, power generation etc. where essentially the right to be a mono/duo/oligo poly is being auctioned). Fine. Unless these infra businesses churn out fantastic IRR, and very quickly scale up in volumes to generate huge free cash flow post debt servicing, where is the money to invest in more and more ventures? Why will the lenders or investors trust you before you have proven successful ? A tempting shortcut is drive the stock price of equity sky high and use it as collateral to raise more funds.

It can work for a while, but pretty soon ALL of your ventures, not just one or two, need to generate strong IRR and cashflow month after month, Q after Q to enable huge debt servicing, and also generate significant FCF for debt reduction and de-leverage, in order to go to the market again and seek more funds.

Then there are other temptations like tax evasion, over/under invoicing, accounting coverups of losses, imaginary revenues etc when you realise you can no longer control the bubble.

While I'd want to see more and more successful entrepreneurs emerge from India, a huge scam will do the nation a great disservice.

When a company has done nothing wrong, its better to refute accusations by giving factual data than threatening to sue.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Tanaji »

Adani group seems to be in free fall at the moment.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Cyrano »

There is blood flowing...
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chanakyaa »

gakakkad wrote:...very curious what instruments do they have a short position. And I wonder how much the short position actually is...
The amounts we are talking are very large...and huge incentives for the short sellers. Also, if the company is raising more capital, this report will deter any institutional money manager from committing more money to Adani group. This is a hit job and may be timely one....

Some background. Look at some of the maturities of the foreign currency debt. If the company fails to raise, USD/EUR, then approx $10+ billion raised between 2015 and 2021 will be in trouble (starting with maturities in 2024)....this will cause a default, massive reputation damage to the largest Indian conglomerate, lawsuits in the foreign countries (esp. YooS), and association with mudi ityadi. In fact, I wouldn't be surprised if this is just the tip of the iceberg....target is 2024.

First, below is part of the disclosure from Hindenburg website
Disclosure: We Are Short Adani Group Through U.S.-Traded Bonds And Non-Indian-Traded Derivative Instruments
Legal Disclaimer
We hold short positions in Adani Group Companies through U.S.-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities. This report relates solely to the valuation of securities traded outside of India. This report does not constitute a recommendation on securities.....
https://financialpost.com/pmn/business- ... ort-seller
Image

One of many scenarios...
  1. Adani raised over $10 billion between 2015-2021
  2. USD debt must be repaid or refinanced starting from 2024 (unless there are earlier maturities)
  3. Hindenburg publishes nasty research report and takes short position in publicly traded Adani portfolio company debt
  4. Reading the report, institutions refuse to lend additional capital (USD) to refinance maturing debt
  5. This causes further panic if market realizes that company will not receive additional funds repay maturities. Remember, Adani earns majority of its earning in INR (not USD), which means it has to raise USD from somewhere.
  6. Bond values drop and market realizes that company need to raise USD to repay debt
  7. Hedge funds and fast money come in
  8. If company can't raise enough debt to repay 2024 maturities, assets will need to be sold
  9. This is when like Bollywood style heroes -- foreign companies -- come in as saviors to scoop up India infra assets at dirt cheap prices
  10. Hindenburg and hedge funds buy back shorted debt making billions (essentially paid for the hitj0b)
  11. Adani's reputation is screwed
  12. India's reputation, Mudi/BJP reputation is screwed
  13. India's growth story, infra and investment in development in screwed
  14. And, yes, RaGa gets a last laugh against Mudi to say "I told you so...." (yes, we will be in 2024 when all this happens)
Finally, it doesn't matter whether the report is right or wrong. A nasty trap appears to have been laid for Adani. And, Gautam Adani needs to do what Dhirubhai Ambani did, turning the tables on the Kolkata bear cartel.

Of course there many other paths and the end result could be different...so plz don't hold me to one of gazzillon outcomes.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vijayk »

How did Ambani turn the tables? Google/FB stake?
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by yensoy »

If things go sour, GoI must step in and ensure that any purchase of Adani's crown jewels at throwaway prices are done by Indian entities alone. The wealth needs to remain within the country. As for investors losing their shirt, well this was a risky play. Fraud can be prosecuted, excessive leverage can't.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vijayk »

https://swarajyamag.com/commentary/what ... dani-group
One of the reasons for the scrutiny was the group's high debt load, which stood at nearly Rs 2.2 lakh crore at the end of FY22. Nevertheless, the group clarified that a significant portion of the debt came from foreign lenders based on its strong credit rating.

CreditSights, a credit research company, came out with a report that called the group deeply overleveraged. But, a while later, the research organisation toned down its criticism of the group's leverage after a meeting with the company.

Just as the furore around its debt was dying down, a short-selling firm named Hindenburg Research came out with a research report titled "Adani Group: How The World's 3rd Richest Man Is Pulling The Largest Con In Corporate History".
According to Hindenburg, the stock valuations of the group are nearly 85% higher than the fair value of the stock, measured by relative multiples. The report alleges that the promoters hold a significantly higher stake than the SEBI stipulated 75 per cent through various entities. After promoters, a significant portion of the shareholding is owned by "funds" that have invested their entire asset base into a single stock, which is unlikely to happen in funds.
The report alleges that SEBI had previously pulled up the Adani group for colluding with Ketan Parekh to push up stock prices. The report has attempted to establish a continuing relationship between Parekh and the Adani group by citing that Parekh's London firm Orbit Investment Securities is run by Jayechund Jingree, a former director of Adani Global Limited, a Mauritius-based company.

Similarly, the report has alleged connections between the Adani Group and Amicorp, which it says is an organisation that aids in laundering money.

According to Hindenburg, Amicorp was one of the key players in the 1MDB scandal where $4.5 billion worth of taxpayer money was siphoned off. Further, it alleges the group's contact with fugitives, and the involvement of group patriarch Gautam Adani's brothers in activities that the government investigated. The report also suggests that shell companies launched by members of the Adani family were used to siphon off money from the Indian entities without proper disclosures.
Hindenburg itself has been a subject of investigation due to its practice of going short on the stocks before coming out with research reports. In addition, a significant part of the report focuses on past investigations and activities.

In a country like India, where bureaucracy and politicians wield significant extra-legal power, several large conglomerates have been under investigation. Sometimes these charges were genuine, while sometimes, they are simply made up only to create trouble.

If all investors in India were to only rely on past allegations, a significant chunk of publicly listed companies in India would not be investable. Yet, it would serve the Adani group well to clarify these issues and help investors understand the conglomerate better.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chanakyaa »

How did Ambani turn the tables?
How Dhirubhai Ambani turned the tables on the Kolkata bear cartel
Dhirubhai story is slightly different from 1980s, but relevant. In this case you are dealing with well-oiled, international public/private apparatus. See, this comes right after WEF.
If things go sour, GoI must step in and ensure that any purchase of Adani's crown jewels at throwaway prices are done by Indian entities alone. The wealth needs to remain within the country. As for investors losing their shirt, well this was a risky play. Fraud can be prosecuted, excessive leverage can't.
Govt. bail-out is definitely an option, if things really deteriorate b'cas company has limited avenues of raising YooSD currency. And, investors loosing their shirt isn't the problem. What is most important in this case, is the success in defining anti-India-investment narrative, which will be played against GoI, mudi etc. for elections, dampen future investment etc.

Sorry, didn't mean to bring politics here, but I thought the context was relevant for what its worth.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Cyrano »

Govt need not bail out with public money. Better to organise a fire sale to another Indian group like it was done for Satyam.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vijayk »

Cyrano wrote:Govt need not bail out with public money. Better to organise a fire sale to another Indian group like it was done for Satyam.
Yes. Same as Bushan steel etc.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vera_k »

If the underlying business is solid, and the accounting is trusted, they can always sell more equity domestically to reduce debt. The equity has had a good run so plenty of room there for dilution.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Cyrano »

Reading the report, institutions refuse to lend additional capital (USD) to refinance maturing debt
This causes further panic if market realizes that company will not receive additional funds repay maturities. Remember, Adani earns majority of its earning in INR (not USD), which means it has to raise USD from somewhere.
Bond values drop and market realizes that company need to raise USD to repay debt
Hedge funds and fast money come in
If company can't raise enough debt to repay 2024 maturities, assets will need to be sold
How many of you will go ahead and invest in a company's bonds if it said in the prospectus "We expect to raise additional funds from the market to repay the principal when these bonds reach maturity" ?

Servicing debt ie paying interest and at the end the principal in USD while earnings are in INR adds an additional burden on expected financial performance.

1$ waz 70.4₹ in 2019, it's above 80₹ now. About 13% drop. So to pay the principal now in USD it will cost 13% more than the amount borrowed, on top of all the interest payments.

Annual inflation in india was about 5% approx.
So costs are up by nearly 30% over 5 years.

Underlying businesses are not solid - vulnerable to global economic slowdown and geopolitics.

Apparently their CFOs don't last very long, auditors are some garage firm, other auditors have put reservations. - see the H report.

Equity has tanked this week, unless Adani is able to refute every single allegation with factual data in a publicly held investors meeting and reassure every one, things look catastrophic for him and his group.

This "world's top X richest man" label will attract all kinds of media attention, some of it predatory. That's life.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Atmavik »

^^ if Adani goes belly up then it will hit our infra development, Hope the vizhinam port gets completed on time. It has faced enough delays already
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by nachiket »

Atmavik wrote:^^ if Adani goes belly up then it will hit our infra development, Hope the vizhinam port gets completed on time. It has faced enough delays already
Their hands are in too many big infra projects not just Vizhinjam. Those getting stuck because of the consequences of this attack on Adani is probably the worst case scenario for the Indian economy.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by yensoy »

nachiket wrote:
Atmavik wrote:^^ if Adani goes belly up then it will hit our infra development, Hope the vizhinam port gets completed on time. It has faced enough delays already
Their hands are in too many big infra projects not just Vizhinjam. Those getting stuck because of the consequences of this attack on Adani is probably the worst case scenario for the Indian economy.
I don't think this is necessarily bad. They were getting too big for their shoes, in some sense getting monopolistic - see for instance their winning bids on airports. Keeping things honest is a good thing, if this lets some air out of the balloon it's good. If the balloon is weak and pops, it's also good. The Indian economy is much bigger than Adani. INR isn't going to tank because they need sudden access to loads of USD given the overall size of our economy. They and everyone else borrowed in USD because they were getting funds at 3% and below (not the case anymore). They can't roll over the debt at 3%, so if they cannot pay back they may have to default and debtor takes a haircut.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Atmavik »

^^^ in the long term this is all good but Adani is into some strategic stuff like the transshipment port and copper smelting plant ( after sterlite closure ) . Are govt banks on the hook for Adani’s loans ?

Why does Adani need to borrow in $ ? For international projects like the Aussie mine ?
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by yensoy »

Atmavik wrote:^^^ in the long term this is all good but Adani is into some strategic stuff like the transshipment port and copper smelting plant ( after sterlite closure ) . Are govt banks on the hook for Adani’s loans ?

Why does Adani need to borrow in $ ? For international projects like the Aussie mine ?
Everyone was borrowing in dollars because of the low, low interest rates. Even with currency hedging/futures contracts it was cheaper to borrow abroad than domestically.
rahulm
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Joined: 19 Jun 2000 11:31

Re: Indian Economy News & Discussion - Nov 27 2017

Post by rahulm »

From my WA grp. Its a composite over last 3 days

-begin-

H=Hindenburg

H don't directly take positions . They do research and charge a hefty fee for profits from their research. They reach out to hedge funds that go short tie up capital and then hit the target ..

So that means H would have tied up 10 first for 10 b of capital..and started to create position the break the banks pledges

The stocks are not available in market with anyone but 70% of Adani debt 1.9 L Cr is owned by PSU/ Indian bank Banks - edited later: It appears total Indian banks exposure is 38% ..not 70% of debt.. but that excludes debt given by Indian banks offshore subsidiaries in foreign currency .. like ICICI UK

And 10B of short portions over time can break banks . It's Iike a run of a bank. must happen fastaqnd the stampede creates a fall..the lack of liquidity in the stock when a particular bank is forced to sell will make the fall.harder.

So what needs to break is just one Bank

They seem to be targeting SBI And ICICI but could be others

We will know in a few days how qnd where they have created shorts ..I suspect it will be in the bond markets and traded FNO stocks of A group and big PSU banks maybe even a few banks like SCB.. not sure which banks are lenders

Sh*t is going to hit the Fan on Feb 1st .

The listed companies of ports / ent/ wilmar/ cement are going to get smashed for sure
But if FM calls this a speculator attack ON India and tells PSU banks to not sell then it becomes a poker game
INC will need to play a big role here .. international media ...deep state oppositions manoeuvres all pins must line up quickly

Else H and Bill Ackerman + Hedge funds may not pull it off . The have to tie FM's and M hands .


The strength of their strategy is that A shares have no support and no liquidity. The weakness is that PSU BANKS don't need to operate like private banks .. they never need to sell so long as the infrastructure project is a real one and not fake.

Adani has no cash flow issue . The valuation was just to support debt ..so long as there's no repayment right now they can drag this.

H has just whet their appetite .. lot more will come when.if they see some cards falling..

--end--
Last edited by rahulm on 28 Jan 2023 14:21, edited 1 time in total.
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