A report by Hindenburg Research, a short-seller based in the US, brought down the valuation of all Adani group companies to the extent of $118 billion in ten days.
The Adani group was completely overwhelmed and reacted by first cancelling the follow-on public offer of Rs 20,000 crore even though it was apparently fully subscribed and then declaring the report as an ‘attack on India’.
This, says P.N. Vijay, a veteran investment banker, is a “completely childish” reaction. “Adani needs to handle it professionally. He should have held investor conferences,” Vijay says to Sidharth Bhatia in this podcast discussion.
Vijay, who was convenor of the BJP’s economic cell for many years and also a spokesperson for the party, dismisses the notion that short selling is any kind of unethical activity. “It is perfectly legitimate, but not for weak hearts.” For Hindenburg to release a report and then short sell was no conflict of interest either, he says.
In this discussion, Vijay analyses the weaknesses in the Adani group model and the fact that if SEBI had wanted to, “it could have conducted an enquiry in market manipulation in four or five days”.