Amid Hindenburg-Adani spat, Anand Mahindra says ‘Never, never bet against India’

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Mahindra Group Chairman, Anand Mahindra, who has been very active on his social media, often shares posts on offbeat topics, inspirational and success stories. This time he has come in support of the Adani Group, which is currently drawing the Hindenburg controversy.

Extending his indirect support for the Adani group, Mahindra wrote: “The global media is speculating whether the current challenges in the business sector will stumble India’s ambitions to be a global economic force. I have lived long enough to see us face earthquakes, droughts, recessions, wars, terrorist attacks. All I will say is: never, never bet against India.”

US short seller Hindenburg Research in a January 24 report had published a report on the Adani Group accusing it of misusing offshore tax havens and noting concerns about high debt that caused the Group’s shares to plunge.

The group holds short positions in Adani group companies. Hindenburg Research said evidence that the Group has engaged in a “blatant scheme of stock manipulation and accounting fraud over the course of decades.” Hindenburg Research said the seven publicly traded companies in the Adani group are 85% disadvantaged on a fundamental basis due to sky-high valuations, Hindenburg said in the report.

Shortly after the report was published, the market capitalization of Adani Group companies fell by almost $1 lakh crore as a result of a major stock market correction. The next day, when trading restarted, Adani Group companies continued to lose money, driving the market capitalization decline from two days to $4 lakh crore.

More than $110 billion was removed from 10 companies, including Adani Group-related flagship Adani Enterprises. Finance Secretary TV Somanathan called the drop in Adani Group shares a “storm in a cup of tea” from a macroeconomic perspective.

Recently, Gautam Adani, once “the richest man in India”, was kicked off the list of the world’s 10 richest. Mukesh Ambani overtook his rival and broke into the top 10 list.

Earlier, on February 3, Adani Group’s credit ratings were cut to negative by S&P Global Ratings, as investors grow increasingly concerned about potential corporate governance risks and funding challenges. Prior to this, Moody’s Investors Service cited similar concerns about Adani’s ability to raise capital or refinance debt maturing in the next few years. Fitch Ratings said it does not expect material changes to Adani Group’s forecast cash flow and noted there are no significant overseas bond maturities any time soon.

As far as Indian politicians are concerned, questions on the Adani issue were raised in Parliament by several opposition parties. They have demanded a Parliamentary Joint Committee inquiry or a Supreme Court-supervised Committee inquiry. TMC deputy Mahua Moitra has also repeatedly raised questions about the company. Leading supporter and BJP Rajya Sabha member Mahesh Jethmalani asked on Friday what Narendra Modi’s government has to do with the Hindenburg-Adani issue.

“What does the government have to do with this? No one has said what the role of the government is in this. LIC (Life Insurance Corporation) is an independent organization. They have decided to make some investments,” he told the PTI news agency.

Meanwhile, Adani’s former lawyer and India’s former Solicitor General Harish Salve recently claimed that no one was happy with the way Indian businessmen were making their presence felt globally.

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