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The Indian stock market is shaking over the Adani scandal

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The Indian stock market is shaking over the Adani scandal

The challenge in India to one of the richest men on the planet is holding the stock markets with bated breath. In the viewfinder is Guatam Adani, head of the Indian giant of the same name, and first in the ranking of the Scrooges of Asia.
His company builds coal-fired power plants and wind turbines, controls ports and mines. And yet, since last Wednesday, the great Adani empire has been crumbling under the blows of the sharp collapses of its shares. In a few days the securities have lost a third of their value. This took the conglomerate’s losses to more than $48 billion.
The blow was struck by a report by Hindenburg Research. The company with the catastrophe-evoking name specializes in short selling, i.e. on the fall of securities on the stock market. It is an activist fund, also known as a vulture. The tactic is this: this type of funds, which almost always come from Wall Street, study the prey companies for years and then, surprisingly, cause the stocks to collapse, perhaps through media campaigns. First, however, they make big buys on short positions and thus rake in billions when the stock falls. Hindenburg obviously has a “short” position at Adani and accuses the company of having “operated a scheme of stock manipulation and accounting fraud for decades.”
This is what was written in the very long report on which Hindenburg worked for two years. Hindenburg Research’s allegations quickly flustered investors who rushed to sell. Even today on the Sensex in Mumbai, the stock is down 18%. Since the beginning of the year it has lost 30%. The report said major Adani Group companies have “significant debts” placing the conglomerate on a “precarious financial footing”. Even the banks with which Adani is indebted have suffered a significant drop in value and put the entire Indian stock market in difficulty which has recently been advancing in investor preferences. This is the case of the Icici Bank, among the ten largest companies by capitalization on the Sensex, which lost almost 10%. Similar trend also for the State BK of India, another big among the major capitalized.
Adani Group denied the allegations, calling the report a “malicious combination of selective disinformation and outdated, unsubstantiated and discredited claims” aimed at damaging the group’s reputation.
With a net worth of $97.6 billion, billionaire Gautam Adani is still the seventh richest man in the world, according to Forbes magazine. Before the Hindenburg report, he was in third place. After Hindenburg’s short attack, the tycon lost 45 billion.

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