Hindenburg Report May Discipline Adani Group & Prosper It Further.
Samaj Vikas Samvad
New Delhi,
Hindenburg report may discipline Adani Group and prosper It further.
In 2006, A renowned economic affairs expert and a very potent journalist Mr. Swaminathan S. A. Ayer researched and wrote a paper for the Cato Institute on Gujarat’s new strategy of port-based development .
This strategy was launched by Congress chief minister Chimanbhai Patel in the early 1990s and expanded by BJP’s successors.
The Economist Mr. Ayer visited Gautam Adani’s new Mundra port and he was immediately struck by the Adani port’s high automation and speed.
Mundra port operated by the Adani’ seemed to be on another level…
Mundra port operated by the Adani’ seemed to be on another level.
Mr. Ayer expresses in one of his TOI column that he was astounded to hear that This Adani port has started financially compensating any ship that was not admitted and unloaded on schedule.
Shri Ayer further writes, while working in Mumbai in 1990, I had seen ships wait 20 days for a mere port entry.
So, Mundra port operated by the Adani’ seemed to be on another level compared to the other big port operators across the globe.
Hindenburg Research report has alleged vast price rigging by Adani companies.
The Hindenburg Research report has alleged vast price rigging and fraud by Adani companies.
These charges are serious, and due to which the Global investors have stampeded out of Adani shares in a whisker.
Surely we need a thorough investigation, and punishment of the guilty. But, Mr. Ayer Further adds, Let me raise a separate linked issue.
From humble origins to global No. 3 is impossible without exceptional business skill.
Adani’s critics say he shot to riches not through skills but manipulation and political favours, minting money in cozy monopolies, To which I beg to differ.
For Adani Groups Going from humble origins to global No. 3 in two decades is impossible without exceptional business skill.
Critics accuse BJP of ‘giving’ Adani valuable assets, from ports and mines to airports and transmission lines.
No. What the government initially gave Adani was the right to operate a minor port in the Kutch desert without even a rail connection.
To convert this desert patch into India’s largest port is close to miraculous.
Adani Group has also acquired jetties and ports by beating global giants like Maersk and Dubai World in competitive auctions.
Adani Group has also acquired jetties and ports in a dozen other locations, beating global giants like Maersk and Dubai World in competitive auctions.
He is incomparably India’s top port operator, handling an estimated quarter of total Indian freight.
This makes Adani Group a national champion.
So, Govt Of lndia is backing him to acquire strategic jetties and ports in Sri Lanka and Israel.
Critics call this a favour. Is It! Really?
Adani’s skills have made him a strategic player, more than just a businessman.
The Sri Lanka terminal will cost $750 million and Haifa Port $1.18 billion.
No Indian rival would dare risk so much even if offered on a platter.
Adani’s skills have made him a strategic player, more than just a businessman.
A port business is no cozy monopoly.
It has to compete in logistics and pricing to woo ships from established rivals.
Mundra Ports logistics have attracted business investments of thousands of crores, creating an industrial hub in the desert.
It has the world’s largest automated coal-handling facility.
2017 Morgan Stanley report puts APSEZ in the top 25% of global port companies.
A 2017 Morgan Stanley report puts Adani Ports and Special Economic Zone (APSEZ) in the top 25% of global port companies.
Critics focus on government favours to Adani.
In India, business success requires good management of not only factories but politics too.
Not all businessmen cozy up to politicians.
But while this opens doors and overcomes some rules, it cannot guarantee success.
Anil Ambani is often accused by Rahul Gandhi of getting 30,000 crore in Defence deals.
For that matter Anil Ambani is often accused by Rahul Gandhi of getting 30,000 crore in Defence deals. Yet, he has flopped commercially.
Once, Dhirubhai Ambani was also accused of political manipulation and boondoggles.
He responded, ‘What have I done that every other business- man has not?’
There was no reply.
Other businessmen, many with formidable historical advantages, had also wooed politicians and fiddled books.
Dhirubhai Ambani to beat the old giants at their own game signified immense talent.
For a newcomer like Dhirubhai to beat the old giants at their own game signified immense talent.
Something similar can be said of Gautam Adani.
Dhirubhai’s dubious acts are detailed in Hamish McDonald’s 1998 book, The Polyester Prince.
But critics are dead wrong to think that he was just a successful manipulator:
During the license-permit raj, manipulation was inescapable.
Once the economy was liberalized, Dhirubhai Ambani built the world’s largest oil refinery.
But once the economy was liberalized, Dhirubhai Ambani built the world’s largest export-oriented oil refinery with operating margins higher than even Singapore’s famed refineries, proving himself world class.
He got favours in telecom but created the cheapest telephone network in the world.
Those who focus only on his manipulation are blind to the phenomenal skills that made him a historical titan, warts and all.
Adani is treading a similar path.
Dozens of new tycoons with strong regional political clout joined the infrastructure boom of 2003-08.
Critics say Adani deals mainly in infrastructure where coziness to the government matters more than true skills.
The answer is a big No.
Dozens of new business tycoons with strong regional political clout with the then governments at the center joined the infrastructure boom of 2003-08.
But despite having political godfathers, many ran into trouble and went bust, leaving banks with enormous unpaid debts.
Success in infrastructure requires skill, not just political friends.
Success in infrastructure requires skill, not just political friends.
Mr. Ayer goes on further- Readers may think I am a great Adani fan.
But I do not own any Adani company shares because of high prices and high risk.
Adani has been diversifying and expanding at breakneck speed using borrowed money, bidding very high prices in auctions and acquisitions.
This facilitates fast expansion, but carries great risks.
Hindenburg report may be the best thing that ever happened to Adani.
History has examples aplenty of business titans who diversified crazily to create giant conglomerates, succeeded for a few decades amid applause, but eventually came a cropper (like General Electric under Jack Welch).
So, I think the Hindenburg report may be the best thing that ever happened to Adani.
It will slow his speed of expansion and diversification, and force his financiers to be diligent and cautious in future.
This could impose highly desirable financial discipline on Adani, to his own benefit.
Hindenburg for Adani may be “A blessing quite effectively disguised”.
Hindenburg may has been a blessing in disguise – or, in Winston Churchill’s words in response to his wife trying to cheer him up after his post-war electoral defeat, “A blessing quite effectively disguised”.
One day Ayer might actually buy Adani’s shares.
Swaminathan S A Ayer signs off with desired optimism…
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Samaj, Samaj vikas, Samaj Samvad, Vikas Samvad, Samaj Vikas Samvad,
समाज, समाज विकास, समाज संवाद, विकास, विकास संवाद, संवाद, समाज विकास संवाद,
সমাজ, সমাজ বিকাস , সমাজ সংবাদ, বিকাস, বিকাস সংবাদ, সংবাদ, সমাজ বিকাস সংবাদ,
