trustingtrust
The Ambanis are actually not very different from the Adanis, just better at hiding. Hindenburg might have take a short position based on numbers but its likely that as long as the current government stays in power its unlikely these two giants (whether they are really giants or no) will change as governments play a big role in such things. Like someone pointed out, it's more likely that their cons will outlast Hindenburgs short positions. Also we dont know the size of Hindenburgs short. For all we care they have shorted 10$ for this article. I am not defending Adani but I did make money on Adani Wilmar simply because compared to other FMCG stocks it was actually undervalued. If you look at some of the other fmcgs they are significantly more overvalued than Adani Wilmar was when it entered IPO. I gained almost 3x in a short while after which it hit the overvaluation equal to other FMCGs and I exited obviously because from a value stand point it made no sense even at IPO. So when Hindenburg says this will all crash, they are assuming everyone goes by the books in this world.
xwolfi
I was scrolling down the list of claims and then reached "Introduction" lol

I love short sellers, Citron did a little sting in my city, Hong Kong, trying to short Evergrande with an A to Z demonstration of how it was ponzinomics, to end up being sued by our regulator for stock manipulation and being condemned years later finally to not trade in HK for years. A little while later, Evergrande's Ponzi finally collapsed. Nobody here bothered to disprove the claim, they only cared about the share price dropping too fast.

Any company claiming short sellers are evil are lying to you: they d simply buy back the shares at a discount, if they were so sure of themselves.

skizm
If these companies assets or stocks go to zero or are locked due to fraud or something that makes the actual public stocks untradable, how do you get out of a short position? Borrowing and selling the stock means you can’t get it back to return to the original owner, and buying put options means you can’t sell the stock to the contract holder. Do you have to get out before it gets completely vaporized?
suprgeek
A few items that did not make it into the list:

1) Adani is very close to the current ruling party and the PM - deploying his extensive business network and assets (in various forms) to help get the PM elected (2014) and then re-elected. A bit of googling will reveal the vast scale of politico-corporate nexus between these two - extending all the way back to when they were chums in Gujarat - the Indian state of the PM

2) The only reason the Adani Group has not been hauled up in-front of multiple regulators and law-enforcement agencies on a constant basis is because of #1 above

3)Adani ports seem to be curiously immune to investigations despite literal TONS of drug seizures [1]

4) There were multiple stories of forced resignations being used by the companies across its workforce to trim costs during the pandemic and avoid paying hefty severance per India's strict labor laws

5)A lot of the public sector banks in India are purported to be under pressure to not recall loans or issue fresh loans on demand to him - essentially a federal backstop to all his liabilities - enabling crazy levels of debt

[1] https://www.ndtv.com/india-news/adani-ports-says-its-termina...

stephen_g
Wow. Adani is super scummy, and from research when they were starting construction on a big mine in Australia we knew they were structuring their tax affairs to not pay any tax here [1], but all this is something else.

They have been suing a climate activist here for millions of dollars, and as part of it they had private investigators following him, his wife, and his children, including photographing his children while they were alone on the way to and from school. They were “unapologetic” [2].

Although from what I read of Adani’s human rights abuses overseas (such as forcing native tribes off their lands to build mines and infrastructure, and complete disregard for the environmental effects of their operations poisoning nearby communities’ air and water/food sources) this is a tiny drop in the bucket of that company’s scummyness.

1. https://cdn.getup.org.au/2061-2059-The-Adani-Files.pdf

2. https://www.theguardian.com/business/2020/oct/28/private-inv...

toomuchtodo
Original title: Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History

(too long for HN post title, mea culpa, feel free to change it up dang)

mistermxyzptlk
The Hindenburg report is well researched. Shorting Adani stock won't be the thing that puts nails in Adani's coffin, but rather it is the waning confidence in Adani as these insights get absorbed by the market. It seems as though Adani is "too big to fail" which is actually helpful toward the effort to tank the shares. If Indian government is forced to bail out Adani, then the government won't do so under a structure that is beneficial to holders of today's shares. If taxpayers need to step up, then equity holders must share most of the pain.
fnfjfk
These are the people that broke the “Nikola rolling a truck down a hill” story.

https://hindenburgresearch.com/nikola/

rockyj
Yesterday there was a submission about the BBC's documentary on the "supreme leader". I wonder what mental gymnastics we will see from people who were defending him, after this report. Most likely, they will never read this report.
wmf
This is reminiscent of the FTT/SRM debacle:

1. A highly illiquid asset that's mostly owned by the founder

2. Price manipulation to artificially inflate the asset price

3. Mark-to-market accounting to artificially inflate the market cap

4. Using the inflated market cap to justify borrowing billions in liquid assets

5. A downturn in the market and... the money's gone

jp0d
They also threatened an environmental activist from Queensland, Australia by sending private investigators to stalk him and his nine year old daughter. They're beyond corrupt and are a criminal organisation.

https://www.theguardian.com/australia-news/2022/nov/29/still...

seanhunter
The Mauritius connection is interesting. India and Mauritius have tax treaties[1] which are very advantageous to Indian companies seeking to do business abroad. I don't know the full details but I do know that international companies who have an India presence, are frequently set up with a Mauritius company owning the India entity and doing some sort of back to back billing arrangement.

[1] https://www.forbesindia.com/blog/economy-policy/india-maurit...

safog
He's too big to fail status in India, so it'll be interesting to see how their short position unfolds. They can keep the scam going for much longer than Hindenburg can keep their short I imagine.
rldjbpin
i might be the only one to think this, but the relationship between Adani and the current administration (mainly the PM) has been an open secret. iirc the book "billionaire raj" (2018) also talks about this.

besides the shady ways of raising initial capital, the main crux of the issue with the rise of both Ambani and Adani empires rely on getting favours from local administration. Adani was able to catapult to a big position in the country because of winning contracts from the state administration when the current PM was the CM of the state.

for now, this remains the reality for those who want to set up conglomerates in the country, especially involving infrastructure and commodities.

qikInNdOutReply
Ah, the guns of navarone of the indian protectioned industry versus the ships of international capital gang, what a battle.

Surely, they will try to subvert the indian government and take over local giants to establish a construct similar to the ccp to engage in rampant proxy colonialism.

nus07
How will it affect India’s economy if the Adani Group crashes? India8is currently one of the fastest growing economies and wondering what effect this may have on the economy.
ErikVandeWater
A good day to be thankful for short sellers.
mansoor_
I smell another short squeeze opportunity,
ilrwbwrkhv
Where would India be without their glorious scammers?
mdani
I started reading but couldn't get my sleepy brain around how Adani manipulated the stocks. Sure, the valuations are astronomical but doesn't indicate that Adanis themselves are behind the rise? Can someone please post a TLDR?
mandeepj
When you have the PM in your pocket, you can do whatever you want.

Also, he might be a 3rd richest person on paper, but I call him a flight risk. Once Modi govt is kicked out, he’ll flee India, just like other scammers like Nirav Modi and Vijay Mallya.

downvoteme1
This is something that is well known to Indian investors that most of Adani companies are vaporware that basically have no revenue and trade for price to sales ratio much higher than other companies.

However this guy and his family members are pretty well connected and would be fine as long as Modi is India’s PM. In fact it is even stated that this guy is basically a kingmaker as his massive inflated fortune funds the political contributions to the ruling BJP party.

rcshubhadeep
I am afraid, now modi will ask to ban HN! He won't stand this insult on his biggest friend and greatest money source. Like the govt is trying to ban the BBC documentary..
barbazoo
> Initial Disclosure: After extensive research, we have taken a short position in Adani Group Companies
irrational
I got part way down the bulleted list, then scrolled down (and down and down and down) to see how long it was - and then saw “Introduction”. Wow.
RcouF1uZ4gsC
If you think the US markets have a lot of fraud, they are paragons of virtue compared to India and China.
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paulpauper
Probably almost everyone was thinking, fearing ( or hoping ) it was Elon Musk when they clicked the link. He was no longer #1.
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