Adani-Hindenburg Controversy: Guru Aswath Damodaran has pointed out a loophole in the global economic system that has opened a window of opportunity for Gautam Adani and his company amid a fall in Adani Group’s share prices. The finance professor said that in the global economic setting ESG (Environmental, Social and Governance) deserves the ‘biggest thief’ label far more than Gautam Adani.
In his blog ‘Musings on Markets’, Ashwath Damodaran wrote, “There is another seam or weakness in the global economic setting that Adani Enterprises exploited, and that is ESG, which deserves to be labeled the “biggest thief” compared to Adani. deserves more, because it’s threatening to waste not billions, but trillions of dollars.”
The valuation guru further added that if you review the Adani website and sales pitch, it is quite evident that the company has learned to play the ESG game well, creating an entire ESG universe to underpin its companies, And took advantage of the green bond market. Possibly for its green energy business.
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Pointing out the emptiness of the green bond premise in the global economic setting, Ashwath Damodaran said, “You review the Adani website and sales pitch, it is quite clear that the company has learned to play the ESG game well, with its companies created an entire ESG universe to support it, and tapping the green bond market, possibly for its green energy business,” adding, “In fact, if Adani defaults on its debt, I expect It’s going to start with green bond holders, because I can’t think of a group that deserves to default more.”
On 24 January 2023, US-based short seller Hindenburg Research raised concerns over the debt position of Adani group companies, leading to a sharp fall in Adani Group shares. Short seller’s report forced the chairman Gautam Adani Even though Adani Enterprises to withdraw the FPO (Follow-on Public Offer) 20,000 crore issue fully subscribed. Announcing the exit, Adani Enterprises FPO Chairman Gautam Adani said the decision has been taken to ensure the safety of investors’ money who have stood by the company in such challenging times.
On 24 January 2023, Adani Enterprises’ share price was to expire at 3,442 and was introduced at the price band of FPO from 3,112 3,276 per equity share. Adani Enterprises share price is around today 1,455 each level, logging nearly 58 percent over nine straight seasons.
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