The India Rising Story hit a road block last week, when Hindenburg Research, a short seller, labeled the Adani Group, one of India's largest, fastestrising and most politically connected family groups, as the "largest con" in corporate history. I have no financial or emotional investment in the Adani Group, and in this session, I start by providing a short history of how a obscure, regional family group company became one of India's largest family group companies, commanding a market capitalization in excess of $200 billion at the start of 2022. I trace its growth in revenues from infrastructure businesses, accompanies by slim profits, huge investments and lots of debt. I try to consolidate the Hindenburg critique of the company into three groupings that it is committing accounting fraud, that it is manipulating stock prices and that Indian institutions (banks, regulators, LIC) are staying on the sidelines. Rather than call it a "big con", I am inclined to believe that this is a company that is exploiting the seams and weaknesses in the India story, from the obsessive focus on control in many of its family groups to the inertia and indifferences at institutions to misplaced priorities at regulators to the dominance of bullish momentumbased trading in markets. I close with a valuation of Adani Enterprises, the Group's holding company, and find it over valued, even after the mark down in prices last week.
Slides: https://pages.stern.nyu.edu/~adamodar...
Valuation of Adani: https://pages.stern.nyu.edu/~adamodar...