Today, major short seller,
Hindenburg Research
putting on a market moving call
on Adani Group.
It's the family-owned businesses
of Asian billionaire, Gautam Adani.
India’s Adani Enterprises
is facing unprecedented turmoil.
It shares have plunged by nearly 20%
Overall markets are under a lot of pressure
and Adani Group stocks,
they are falling in trade today.
Hindenburg said, Adani pulled off
the largest con in corporate history.
It says Adani companies
did a brazen stock manipulation.
In 1937, there was a Hindenburg disaster in the US
and just as in 1937, Hindenburg’s Blimp
skydived onto the ground,
similarly in the 2023 Hindenburg disaster,
Adaniji’s stock
is skydiving onto the ground.
The Hindenburg Report has made
some very big allegations on Adani,
and Adani in his response
has called it an attack on India
and a conspiracy against India.
So, what's true? What's untrue?
And is this a controversy to malign India’s name?
Let's find out.
🎶[Music]🎶
Hello, hello, you are most welcome
to this episode of The Sham Sharma Show.
I am the CEO of Secularism, Sham Sharma
and a secular salute to all of you.
So before knowing the Hindenburg report,
let's find out, bro, what is Hindenburg?
Hindenburg Research’s website
says it specializes
in forensic financial research.
It says it has decades of experience
in the investment management industry.
An Indian Express report
says that over the last few years,
Nate Anderson, the founder of Hindenburg,
has published critical research and analysis
of alleged corporate fraud
that have triggered investigations
and regulatory action.
A Bloomberg report even says
that over the past few years,
Nathan Anderson
has made a name with an analysis
that sends stocks sinking.
It is a firm that basically does research
on large publicly listed companies
and exposes fraud,
and takes a short position on those companies.
That is, they know,
that after the publication of their research,
most likely, the stock value of those companies is going to fall.
So, they first sell the stocks of that company,
and when the stock value of the company falls,
they buy it at a cheaper price.
They did this kind of research and short position
with a company named Nikola
and crashed their stock as well.
And this company, in its report,
has leveled some very big allegations on Adani’s.
For example, Adani, in the last few years
has been conducting a very large-scale stock manipulation,
almost worth $218 billion.
They have has also accused Adani of accounting fraud.
This allegation also gains credibility by the fact
that if you look, in the last two and a half years
Adani's wealth has been increased by 13 times.
Hindenburg says that this wealth increase
is mostly due to Adani's stock price appreciation.
According to Hindenburg,
many Adani companies
are running on very unsustainable debt
and they are also running
a negative free cash flow.
And despite all this
their stocks are overvalued by 80%.
Hindenburg also alleges
that by practicing wash trading, Adani's companies
are increasing artificial demand of its stocks,
to show that their stocks
are very desirable in the stock market.
Hindenburg has also said
that they have also contacted SEBI,
that is, Securities and Exchange Board of India.
From which they have received information
that SEBI is also investigating Adani on all these charges.
Now due to such a bombshell report,
Adani's net worth has basically
decreased by 50 billion in a week.
Helpless Pakistan too must be thinking at this time that man,
at least we would have got that money.
For 2-3 years, would have also had electricity in the house.
At present, Adani and Pakistan
are having a competition between them
that who will become a pauper first?
But don't worry, I think this race
is going to be won only by the atomic power.
Just before this controversy broke out,
Adani had launched an FPO,
which is called a follow-on public offering.
In which a publicly listed company on a stock exchange
offers its stocks for people to buy.
If your company is already listed,
your shares are traded
but the promoter, the owner,
who has, who wants to sell a bunch of his shares,
in this case, the Adani’s have a lot of shareholding.
It's almost in the 70s.
So, they can sell some of those shares.
And in this FPO, big industrialists like Sajjan Jindal,
Sunil Mittal, and people like Ambani had also invested.
And because, after the FPO,
Adani's stock is fluctuating so intensely,
falling so fast, so due to the fear
that it doesn’t sink the money
of these big industrialists also,
after this Hindenburg report,
Adani has canceled this FPO too.
Friend, this Hindenburg report
has proved to be so effective
that even Rahul Gandhi and Fardeen Khan
must be thinking at this time,
that by convincing Hindenburg in some way,
they get a report written on Modi as well.
Only that can be of help.
Because by the Bharat Jodo Yatra
only Modi is being helped.
Rahul Gandhi is in your mind,
I’ve killed him.
Now, in response to this Hindenburg report,
Adani has sent a 413-page,
extensively long and wide response.
But in response to that,
Hindenburg replied again
and said that out of these 413 pages,
only 30 pages are relevant
and majority of our questions, meaning 88 questions,
have not even been answered in this report.
In fact, according to Hindenburg,
the reply that is sent by Adani,
make the allegations initially made by Hindenburg
even more concrete.
They stand by their report,
and Adani Group response
argued points we did not raise
So now, in response to all the controversy and pressure,
Adani's CFO recently came and held a press conference,
in which he kept the flag of India in the background
and was trying to show,
brother, this attack on Adani,
in a way, is an attack on India.
And this Hindenburg report,
is a kind of foreign conspiracy,
against India,
to disrepute the name of India.
So, is there any truth to this thing?
Can such international think tanks
and research groups
be trusted in the true sense?
See, in the last few years,
we have seen that Freedom House
and Reporters Without Borders
kind of organizations that exist,
who have brought out reports on democracy and press freedom in India,
and have downgraded India in them.
The methodology and funding of these organizations
are such that it is often difficult to trust these organizations.
A New York Times report had found
that more than 12 prominent research think tanks,
which are from America,
have received crores of rupees from foreign governments.
One of America's most respected think tanks,
the Brookings Institute,
they get huge donations from Qatar.
They get huge donations from China.
Take the example of Reporters Without Borders.
You will see on their website
that they get funding from the European Union,
from France, and from countries like Sweden.
Freedom House, which recently declared India partially free,
itself receives funding from the US Government.
Receive funding from countries like Norway and Sweden.
That is why they can downgrade India's democracy,
but do not want to comment
on the immigrant’s riots happening in Sweden.
So, the kind organizations and countries
through which they receive funding,
these big research organizations,
looking at that funding you can imagine
how unbiased their research can be in the true sense.
Their research is as unbiased
as Dhinchak Pooja is a very famous poet.
But keeping all these things in mind,
can we say that Hindenburg report is also biased?
Even If you look at the arguments of Hindenburg,
they generally look quite solid.
And Hindenburg is not attacking India.
Hindenburg has clearly mentioned
that India is a vibrant democracy
and are very excited to see India's growth.
It is not blaming India.
It is only blaming Adani
and targeting only Adani.
It's important to remember this.
Because Adani’s CFO
is claiming something else.
In fact, the Hindenburg's report
also gains credibility from the behavior of some other organizations.
For example, Credit Suisse and Citibank,
have refused to accept Adani's bonds
as collateral for loans to private clients,
despite the fact that Adani has never
defaulted on any loan repayment.
So, this is not a good sign for Adani.
So, immediately calling it a foreign conspiracy,
brother, this has been done to tarnish the image of India.
Illuminati wants to stop India.
I don't think it is right to say that immediately,
before we have full proof.
So, what is going to happen with Adani going forward?
See, I think Adani, in India in a way
is almost too big to fail.
There are many content creators and politicians as such
who are saying that this is going to tarnish Modi's image a lot,
because Modi has done projects with Adani.
Yes, brother that is correct.
Look at this Modi and Adani partnership.
The simple thing is that
there is no such big mainstream political party in India,
which does not have a relationship with Adani,
or which does not have projects with Adani.
And as Adani has relationships with so many political parties,
I think they will not let Adani sink, at least.
In fact, India's banking system
is also heavily linked with Adani.
But the fact is that if their expectation or prediction
or their projection of an 85% decline
in Adani's stock prices, comes true,
and I'm very careful
putting those quote marks like that.
If it comes true,
then there will be a lot of damage
suffered by some Indian banks
and also, some mutual funds.
So most mutual funds in India
are not investors in Adani's stock
but a lot of the debt mutual funds
might have lent money to Adani
out of their liquid funds for example
or debt funds for example.
Because Adani has shifted aggressively
to bonds over the past few years,
say over the past 3 or 4 years
to reduce their dependence on banks.
So, once again, Adani Group is so big
and so critical to the Indian banking sector
that if this crisis continues,
this affects all of the stock markets
and particularly the Indian banking sector.
And see in the end I just want to say
that I am not a banking expert in any way.
So, it may happen
that I have missed many things,
I have not even understood many things.
And it is also possible
that in the future,
some such information may come,
by which this video becomes
completely redundant and irrelevant.
But still these charges are quite serious.
I am very interested to see
whether Adani can properly refute these charges or not?
And if these charges are proved,
will the government take some strict action against him?
I want to ask you, according to you,
is the Hindenburg report reliable or not?
Are the allegations made, reliable or not?
What do you think
will happen going forward?
Do let me know in the comments section below.
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Rest, I will meet you in the next episode
and till then stay healthy.
Be happy. Will meet again.
And a secular salute to all of you.