Sell-off in India's Adani deepens to $50 billion

[FuturePAF]

Dont just see on Adani, what would happen on Indian stock market for the next week as confident on Indian stock market will likely plunge over this issue.

The possible huge outflow of foreign investors in Indian Stock market will likely hurt Rupee as well for the next weeks to come

If they fail, then a lot more goes down than his investors; Adani will take down India’s industrial policy with him.

What percentage of the Indian stock market do his companies comprise? What percentage of the Indian economy do his companies comprise?

 

[Hecig]

Why is all the infrastructure work given to Adani?

Because we follow a transparent model called "Bidding and Tendering process" for projects.

 

[Indos]

But why should everything be done by Adani? Why not spread it around to the Tatas, Reliance, L&T, Birlas, Mahindras, The Infosys, Wipro, HCL etc.?


Why is all the infrastructure work given to Adani?

Dont know for sure, here in Indonesia infrastructure project are mostly done by SOE like Wijaya Karya, Hutama Karya, Adhi Karya, Waskita Karya, and Nindya Karya. They have focus on business and have subsidiaries companies that focus on construction business like steel engineering, modular construction, and others.

Even Adani also has cement business as well, for Indonesian our cement industries are also heavily controlled by state under SIG

 

[epebble]

Because we follow a transparent model called "Bidding and Tendering process" for projects.

So, you are saying Adani won all these projects because he was lone bidder or his bids were the best? Is there not a monopoly concern there? Fear of excessive concentration of risk? What if he has won bids to build 10 freeways, 10 railroads, 10 airports and 10 ports and goes out of business in the middle?

 

[Indos]

What percentage of the Indian stock market do his companies comprise? What percentage of the Indian economy do his companies comprise?

I dont know the detail, I believe the author has more knowledge than me. What is more danger is not about Adani business in particular, but foreign investors level of confident on Indian Stock Market and Bond Market.

At this moment, many currencies are in stress condition due to US The Fed tightening policy and also due to higher energy prices that make many countries trade balance get huge pressured. Japan and South Korea for example posted huge trade deficit last year and Pakistan, BD, Sri Langka go to IMF due to the combination of that problems as well. Trade deficit will suck USD reserve.

Adani case would likely press Indian stock and bond market and in the end surpress their currency comparative value with USD which comes from foreign investor possible out flow from their financial market. This could lead to additional interest rate increase by Indian Central Bank to strengthen Indian Rupe that of course will effect growth negatively. That is the possible relation of Adani case with Indian economy as your question is more about knowing the impact with Indian economy.

 

[Hecig]

So, you are saying Adani won all these projects because he was lone bidder or his bids were the best? Is there not a monopoly concern there? Fear of excessive concentration of risk? What if he has won bids to build 10 freeways, 10 railroads, 10 airports and 10 ports and goes out of business in the middle?

You are Right.

We shall immediately scrape this revolutionary and Unfair "Bidding and Tendering process" and instead ask American, pakistanis and Hindenberg to help us decide the right candidate for Infrastructure projects.

Its not as if we have checks and balances in place. Its not as if we have a constitution or Law or Qualification criteria or Bank guarantee or Auditors.

Hindoos are primitive people who need others to tell us how to conduct business and our lives. Thank you for existing and showing us the truth about ourselves and Adani. What would we ever do without you.

Thank you and Hinderberg for raising such revolutionary question that we would never ask given our limited and primitive society.

 

[FuturePAF]

I dont know the detail, I believe the author has more knowledge than me. What is more danger is not about Adani business in particular, but foreign investors level of confident on Indian Stock Market and Bond Market.

At this moment, many currencies are in stress condition due to US The Fed tightening policy and also due to higher energy prices that make many countries trade balance get huge pressured. Japan and South Korea for example posted huge trade deficit last year and Pakistan, BD, Sri Langka go to IMF due to the combination of that problems as well. Trade deficit will suck USD reserve.

Adani case would likely press Indian stock and bond market and in the end surpress their currency comparative value with USD which comes from foreign investor possible out flow from their financial market. This could lead to additional interest rate increase by Indian Central Bank to strengthen Indian Rupe that of course will effect growth negatively. That is the possible relation of Adani case with Indian economy as your question is more about knowing the impact with Indian economy.

Wealth and growth being concentrated disproportionately in a relatively few conglomerates could be like the Asian financial crisis of 1998. The domino effect on global markets/contagion could spread, slowing down global growth as a whole.

This is on top of the desire for American politicians to incentivize bringing back manufacturing supply chains to the US; stepping back from globalization. Could we be seeing the slowing down if not a trend to see the reversal of offshoring in general.

The end of cheap money could see developing countries stagnate, including India, that is still at the stage where it needs FDI and export growth to continue developing and provide jobs for its large demographic bulge.

 

[epebble]

Whenever a critical project is to be done here in U.S., there is a heavy emphasis on maintaining a viable second source for risk reduction. We have powerful antitrust laws to prevent excessive concentration of critical businesses under one company.
The reason you see Intel-AMD, Boeing-Lockheed, GM-GE etc., duals has roots in this practice. AMD started off its business in CPUs because U.S. government insisted on a second source before using the chips in critical infrastructure.

 

[Indos]

Wealth and growth being concentrated disproportionately in a relatively few conglomerates could be like the Asian financial crisis of 1998. The domino effect on global markets/contagion could spread, slowing down global growth as a whole.

This is on top of the desire for American politicians to incentivize bringing back manufacturing supply chains to the US; stepping back from globalization. Could we be seeing the slowing down if not a trend to see the reversal of offshoring in general.

The end of cheap money could see developing countries stagnate, including India, that is still at the stage where it needs FDI and export growth to continue developing.

Asian Financial Crisis is more due to peg currency and liberal financial sector. Too much borrowing on USD loan as their loan give low interest rate. When sock happen in East Asian financial market, the East Asian currencies plunges and make businesses need to pay their loan double or maybe triple from previous estimation. It makes them fall.

-------------------------------------------

In term of business concentration, India is still moderate. South Korea, Vietnam, Thailand, and Philippine have higher business concentration in Asia.

Asia: the Power of Connections and their Consequences

In our recent book, “The Connections World: The Future of Asia”, published by Cambridge University Press in October 2022, we argue that mutually beneficial links between dynastic business houses and political elites have been important drivers behind Asia’s extraordinary renaissance. Yet, these...

www.ipsnews.net

 

[FuturePAF]

Asian Financial Crisis is more due to peg currency and liberal financial sector. Too much borrowing on USD loan as their loan give low interest rate. When sock happen in East Asian financial market, the East Asian currencies plunges and make businesses need to pay their loan double or maybe triple from previous estimation. It makes them fall.

-------------------------------------------

In term of business concentration, India is still moderate. South Korea, Vietnam, Thailand, and Philippine have higher business concentration in Asia.

Asia: the Power of Connections and their Consequences

In our recent book, “The Connections World: The Future of Asia”, published by Cambridge University Press in October 2022, we argue that mutually beneficial links between dynastic business houses and political elites have been important drivers behind Asia’s extraordinary renaissance. Yet, these...

www.ipsnews.net

So this group going under is just normal churning? Why do they fear his conglomerate going under will be so deleterious to India industrial policy?

 

[-=virus=-]

buy the dip, average some if you must, and hold for a few years.

 

[nahtanbob]

I fail to see how one guy can have the expertise to run ports, airports, power plants, renewables and defense projects. The guy is a college dropout. Please no comparisons to Bill Gates or Zuckerberg

 

[Indos]

So this group going under is just normal churning? Why do they fear his conglomerate going under will be so deleterious to India industrial policy?

Adani has huge debt, and its profit cannot compensate its debt interest rate and payment. He likely to pay its debt through selling its stock that he tried to inflate and through issuing another corporate bond.

His business are many in infrastructure and India future industry. These are factors that relate to India industrial sector.

So this stock value plunge will give his business much trouble. We would like to see what will happen next over some weeks to come

Confident on its stock and its bond issuance will be effected with this case where its business life line depend on that, particularly if you see his business profit and comparison with its debt interest and annual debt payment.

 

[Hecig]

Whenever a critical project is to be done here in U.S., there is a heavy emphasis on maintaining a viable second source for risk reduction. We have powerful antitrust laws to prevent excessive concentration of critical businesses under one company.
The reason you see Intel-AMD, Boeing-Lockheed, GM-GE etc., duals has roots in this practice. AMD started off its business in CPUs because U.S. government insisted on a second source before using the chips in critical infrastructure.

lol.

Competition Commission of India, Government of India

www.cci.gov.in

I fail to see how one guy can have the expertise to run ports, airports, power plants, renewables and defense projects. The guy is a college dropout. Please no comparisons to Bill Gates or Zuckerberg

So what is the "criteria" for a guy to run ports, airports, power plants, renewables and defense projects ?

Does "white christian" cover it ?

 

[LakeHawk180]

I fail to see how one guy can have the expertise to run ports, airports, power plants, renewables and defense projects. The guy is a college dropout. Please no comparisons to Bill Gates or Zuckerberg

What?! It’s not Gautam Adani the man managing individual ports and defense projects.

Like any conglomerate business, they have dedicated subsidiaries under the group structure with their own Board of Directors, Professional CXOs and Talent Managers to run the company.

Indian business environment is dominated by large family owned business conglomerates. Adani is not an exception.