More than the budget, the twists and turn at the house of Adani’s has kept the entire globe glued onto India. The Hindenburg revelation has come at an important juncture when Adani was looking forward to the Rs 20,000 crore FPO that would help raise funds for capital expenditure and debt management. The document itself was critically worded as “brazen stock manipulation and accounting fraud scheme” and “the largest con in corporate history.”Since its release, the Indian stock markets crashed and Adani’s net worth has shrunk. The company also lost USD 90 billion in market, triggering global concern. The fall keeps steeping lower. Even after all this, the FPO was oversubscribed. But in a turn of events, next day itself, Adani announced that he was cancelling the FPO and would return back to the investors, as it was the morally right thing to do.
The full and final budget of the ruling party before the polls, was side-lined due to this revelation. India is at an important point in its growth trajectory. The world is keenly watching and is interested to take part in the growth. To reap all these benefits, India is well equipped and has rightly ascertained its position. The budget also cemented the beliefs. But this report has marked a caution. It has come at the most unfortunate time. As China is opening back, global manufacturers are weighing in on their options. Government crackdowns, erratic covid policy and unhealthy business practices in China, make India the natural choice. But such a report of corporate mis-governance makes investors wary.
How can a single company’s performance affect a country is worth a ponder. Adani and India’s growth have often touted to be synonymous. Modi’s growth from Chief Minister of Gujarat to India’s Prime Minister, marked the expansion of the company and spreading its operations across various sectors. They are the huge private partners to several of the government’s infrastructural projects. They have developed more than 3,100 miles of roads, operate airports and seaports and control 33 per cent of air cargo traffic and 24 per cent shipping capacity. They plan to invest close to USD 70 billion in renewable energy projects. All these are intertwined with India’s growth and its plans of the future.
Just like his business friend, Modi has also been accused. BBC released a documentary questioning Modi’s role in the Godhra train incident and also the state of minorities in India. In both these incidents, the attacks are answered back with nationalist calls, terming them to be an attack on India itself.
Coming back to the Adanis case, this will make foreign investors to reassess the risks involved in investing in India. But in a market, things move very quickly. Though a revelation of this kind may take some time, it will definitely pass. Investors would wait for the tide to settle and this is definitely not something that would hinder India’s growth. The regulators have taken notice and started with their verification process. Their unbiased judgements would help revive back confidence and regain trust in the market.
